As promised, HP starts cutting jobs for services restructure

HP has started issuing pink slips to employees as part of a workforce reduction plan it announced back in June, a three-year process that will reduce its workforce by 3,000 jobs overall as the company restructures to focus on cloud services.

We're hearing reports that folks in networking and services divisions in the U.K. are being notified by their managers now. And the company has confirmed that this round of job cuts is related to the earlier announcement. In an e-mailed statement, the company said:

HP is in consultation with the appropriate representative bodies within the UK regarding potential workforce changes which were announced June 1st, 2010. This is an initiative to transform HP’s enterprise services business to benefit clients through new offerings and improved service delivery.

In June, the company said it planned to 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. However, HP plans to add back 6,000 positions in sales and delivery for a net job loss of 3,000.

At the time, Larry Dignan explained that the move is like "phase two of the EDS integration with an emphasis on delivering IT as a service." HP is trying to 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.

The company said in June that the consolidation moves are expected to create annual savings of $1 billion and, after reinvestment, generate $500 million to $700 million in savings.