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Eileen Yu, ZDNet Asia
June 2, 2010
Hewlett-Packard has unleashed a major reorganization plan that will see 9,000 job cuts and a US$1 billion investment over three years in data center automation to support a "transformation" in the company's service delivery.
In a statement released Tuesday, HP said the announcement is the result of its integration with EDS which it acquired in May 2008 and efforts to improve the company's bottomline.
Tom Iannotti, HP's senior vice president and general manager of enterprise services, said in the statement: "Over the past 20 months, we focused on integrating EDS and improving profitability. Now that the integration is largely complete, we have identified significant opportunities to grow and scale the business. These next-generation services will enable our clients to benefit from the combined technology and services leadership that only HP offers."
The reorganization will see the consolidation of the IT vendor's enterprise data centers, management platforms, networks and applications, creating a "more scalable, modernized and automated IT infrastructure" to support HP's clientele.
The initiative will also yield estimated gross savings of US$1 billion a year, or between US$500 million and US$700 million after taxes and reinvestments, according to HP.
Asked how the cuts will impact the company's Asia-Pacific operations, a Singapore-based HP spokesperson told ZDNet Asia no details related to "geographical locations" are available yet as the final deployment plan is still being finalized.
However, she noted that some 6,000 positions will be added at the same time to beef up HP's sales and delivery services.
The company last month reported revenues totaling US$30.8 billion for its second quarter 2010, a 13 percent increase from the year before. Describing it as "an exceptional quarter", HP CEO Mark Hurd then said the vendor enjoyed "strong performance across every region" and expects "enormous opportunity" ahead.
In April, it acquired Palm for US$1.2 billion after outbidding other suitors in the race for the handheld maker.
Over the past years, HP has never shied away from implementing major reorganizational moves it deems necessary to contain operational costs, including job cuts totaling in the thousands such as the 14,500 staff cuts in 2005 which it said helped save US$1.9 billion a year, and another 24,500 in 2008--over three years--following its EDS buyout.
According to HP, the company currently has some 304,000 employees worldwide serving 1 billion customers in 170 countries. For its fiscal year ended Oct. 31, 2009, it clocked revenues totaling US$114.6 billion.
http://www.zdnetasia.com/hp-no-details-yet-on-staff-cuts-in-apac-62200410.htm
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