HP cuts jobs in restructuring, invests private cloud infrastructure

HP cuts jobs in restructuring, invests private cloud infrastructure

Summary: HP will consolidate its commercial datacenters, management platforms, networks, tools and applications to create a more automated infrastructure that it will use to serve enterprise services customers.

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Hewlett-Packard said Tuesday that it will cut 9,000 jobs over three years and invest $1 billion to focus on new efforts like private cloud infrastructure and desktop-as-a-service. Think of it as phase two of the EDS integration with an emphasis on delivering IT as a service.

The move comes as HP has largely completed its integration of EDS. HP said in a statement that it will build next-generation platforms for its enterprise services business. In a nutshell, HP will consolidate its commercial datacenters, management platforms, networks, tools and applications to create a more automated infrastructure that it will use to serve enterprise services customers. With its next-gen datacenters, HP is hoping to boost services margins.

HP's plan is to take its Converged Infrastructure approach and turn it into a service via the cloud.

Among the moving parts:

  • HP will invest $1 billion in its Enterprise Services unit;
  • It will cut 9,000 positions over a "multiyear" period;
  • However, HP plans to add back 6,000 positions in sales and delivery for a net job loss of 3,000;
  • HP will take a charge of $1 billion spread over multiple years through fiscal 2013 with half of that restructuring hit to come in the fiscal third quarter;
  • The consolidation moves are expected to create annual savings of $1 billion and after reinvestment generate $500 million to $700 million in savings.

Tom Iannotti, senior vice president of HP Enterprise services said "we have identified significant opportunities to grow and scale the business."

In a presentation, Cathie Lesjak, CFO, and Ann Livermore, executive vice president of HP, walked investor through the big plan. Livermore said:

As we look at our cloud services -- that's not the primary focus of our announcement today, but it's certainly a very important part of our overall portfolio for HP. When we think of IT services delivery we think that most of our corporate and public sector clients are going to want a combination of being able to run IT on their premises with their own data centers, outsourcing some applications in areas and then also having other areas delivered to them via the clouds. So we think one of the real differentiators for HP is going to be our ability to help clients with their services all three ways. And certainly the cloud aspects of it are very important.

Among the key slides:

Related:

Topics: Hardware, CXO, Cloud, Data Centers, Hewlett-Packard, Storage, IT Employment

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14 comments
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  • That'll help fix the economy.

    (not really, but most people know that already)
    HypnoToad72
    • Exactly companies keep doing this type of thing and who can buy their...

      @HypnoToad72 products? Not us we don't have any jobs to pay for anything anymore. Companies really need to think things through or just leave the U.S. completely. Then when we start new businesses maybe we will keep all jobs in the us instead of sending them all overseas or to other countries.
      dougogd@...
  • RE: HP cuts jobs in restructuring, invests private cloud infrastructure

    Over 3,000 HP employees to be fired from their current jobs? 200+ HP locations to be closed in favor of remote (read overseas) cloud computing?

    Bill Hewett and Bob Packard are turning in their graves over current HP management's use and abuse of employees. And to think the HP use to be "One of the Best Companies to Work for in the USA" according to Forbes magazine... Capitalism has reared its ugly head with HP announcing they are in effect moving core operations out of the USA.

    It sounds as if HP management wants US to move to India or China so they can make more profit in their greedy eyes...
    Questor1
    • RE: HP cuts jobs in restructuring, invests private cloud infrastructure

      Maybe you haven't noticed but HPs profit margins are not all that. Greed? No, more like competing to stay alive.
      No_Ax_to_Grind
      • RE: HP cuts jobs in restructuring, invests private cloud infrastructure

        @No_Ax_to_Grind My guess is that you do not and probably have not worked at HP recently.

        It really is all about the numbers on a spreadsheet. And not much else.
        pwatson
      • RE: HP cuts jobs in restructuring, invests private cloud infrastructure

        @No_Ax_to_Grind I could easily be wrong, but my guess is that you do not or have not worked at HP recently.

        It really is all about the numbers on a spreadsheet. And not much else.
        pwatson
    • RE: HP cuts jobs in restructuring, invests private cloud infrastructure

      @Questor1 : it's bill and dave
      sir_ob1
  • Hmmm, you mean a main frame with terminals.

    Seems like we have been down that road and it was a dead end.
    No_Ax_to_Grind
  • RE: HP cuts jobs in restructuring, invests private cloud infrastructure

    The only economy that benefits is the countries where HP moves the 9,000 jobs... Probably India or China!

    These HP actions to eventually fire 9,000 employees are yet another sign for US college grads that having a viable and long-term career in IT is dead...
    Questor1
    • RE: HP cuts jobs in restructuring, invests private cloud infrastructure

      @Questor1

      Unfortunaltey, the employees of HP in the Philippines are being affected as well.

      About 80 employees have been laid off in a company that I know.
      swt0616
  • Hurd was upfront about moving jobs to India

    When EDS was bought, there was an announcement that 25,000 people would be fired in the US and 12,500 new jobs would be created in India. Hurd has never made any pretense about caring about US jobs. HP was seriously considering moving their corporate HQ to Bermuda to avoid US taxes, but supposedly Boxer and Feinstein threatened to throw them out of government contracts worth billions per year if they did.
    terry flores
    • if a US company wants to move their corp office out of US then let them....

      @terry flores but force them not to sell their product in the US as well. That will force smaller companies to grow and take over their position and create new jobs in the us.
      dougogd@...
  • RE: HP cuts jobs in restructuring, invests private cloud infrastructure

    The issue is with how a CEO gets measured! Every CEO gets measured on the topline and bottomline - No one is getting measured on employee satisfaction or Job retention or Community contribution. CEO is accountable to the board of directors who are accountable to the stockholders - and stockholders only care about return on their investment. The greed that is attributable to CEO is only the reflection of the greedy world that run's on gains of stock markets that we all are part of! Society has sold its Soul to quick fast returns and CEOs have sold their souls to the stock value of their company. Unfortunately, there is shared ownership for the state of affairs today...

    Cheers
    -Ram
    (Neither a CEO, nor an executive - Just a lowly employee who doesnt get a single stock! like most of the world - just happy to thrive in job I have)
    sreeram_k
  • RE: HP cuts jobs in restructuring, invests private cloud infrastructure

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