freshidea - Fotolia

The axe swings again at HP as it gets ready for life post-split

The HP boss Meg Whitman has never been scared of bidding staff farewell and another 30,000 look like joining the list of those that have departed in recent years

Hewlett-Packard boss Meg Whitman has never been shy of sharpening the axe and trimming the workforce when deemed as necessary to try to improve the firm’s fortunes.

Over the course of the last few years, as she masterminded a turnaround plan, thousands have already gone as part of its restructuring. Last October the number had already reached 55,000 as the original estimates of 34,000 proved to be inadequate.

Now the vendor has decided that it needs to trim more staff as it gets itself ready for life as two distinct operations from the start of November.

The enterprise services operation is in the crosshairs this time and the trigger will be pulled on around 30,000 staff as the firm looks for annual costs savings in the region of $2bn.

The revelation that more cuts would have to be made came at the vendor’s analyst day as it issued guidance for what lies ahead in its next fiscal year.

Statements were issued by both Hewlett Packard Enterprise and HP Inc as the operations started to outline just where they expected to be going in the months post-separation.

The headlines were all grabbed by the Hewlett Packard Enterprise announcements, not only because of the job cuts, but also due to the exposure of the fairly large mountain that needs to be climbed if it is to ever meet the revenue targets it has set out.

The idea is to generate around 37% of the firm's revenues from enterprise services, but it has some way to go to get there. The software side of the business is expected to deliver 7% of revenue and the bulk will come from the storage, networking and server products in the enterprise group.

“Hewlett Packard Enterprise will be smaller and more focused than HP is today, and we will have a broad and deep portfolio of businesses that will help enterprises transition to the new style of business,” said Whitman. “As a separate company, we are better positioned than ever to meet the evolving needs of our customers around the world.”

“These restructuring activities will enable a more competitive, sustainable cost structure for the new Hewlett Packard Enterprise,” she added  “We’ve done a significant amount of work over the past few years to take costs out and simplify processes and these final actions will eliminate the need for any future corporate restructuring.”

Whitman, who will be CEO of HP Enterprise, is also expecting steady growth in the cloud over the next three years and said it was in the right position having chosen to appeal to users running hybrid environments.  

The company expects cloud revenue in fiscal 2015 to be approximately $3bn, growing over 20% annually for the next few years.    

The tune was slightly different over at HP Inc with the CEO of that business Dion Weisler talking about keeping an eye on costs but also planning to make investments for the future.

“The separation enables us to focus our company assets and financial resources on our core businesses, growth opportunities and future while also being very disciplined about delivering long-term, shareholder value," she said.

The opportunities in the printing operation included moving into the A3 copier market and pushing the managed print services approach more to customers.

On the PC side the idea is to go for the commercial market and be slightly more selective about the consumer space. Through the launch of products designed to appeal to business users and mobile offerings including "PC-as-a-Service" the expectation is that some headway can be made in what remains a challenging market.

With some savings, around $0.7bn, coming from the split the hope of HP staff will be that these cuts are the last for a while. Sadly though as history has shown that tends not to be the case.

Read more on Servers

Join the conversation

1 comment

Send me notifications when other members comment.

Please create a username to comment.

I’ll be curious to see if they can pull this off. My experience with HP software has been that they often bite off more than they can chew as it is. Losing that many more positions, with the very real prospect of even more in the near future, makes me think that the quality of their software is going to decline further.
Cancel

-ADS BY GOOGLE

ComputerWeekly.com

SearchITChannel

Close