The technology layoffs aren’t quite over yet. Hewlett-Packard came back from the holiday weekend with two major announcements: Widespread layoffs and a billion-dollar investment.
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HP plans to consolidate its enterprise services’ commercial data centers, management platforms, networks, tools and applications over a multiyear period. In the process, the PC maker will cut about 9,000 jobs. HP pointed to productivity gains and automation as catalysts for the job cuts.
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Over the past 20 months, we focused on integrating EDS and improving profitability, said Tom Iannotti, senior vice president and general manager of HP Enterprise Services. 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.
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‘Eating Your Own Cooking’
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HP bought EDS for about $14 billion in 2008. Typically, large acquisitions lead to layoffs as the merged company eliminates duplicate functions. But HP isn’t making the job cuts without spending. The company said it will invest $1 billion in the next generation of its enterprise-services business, of which the EDS acquisition is now a part.
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Specifically, HP will invest in fully automated, standardized, commercial data centers built on its converged infrastructure and operated by its management software. HP expects the investment will transform its services business and bring new offerings and improved service delivery to its clients. HP will leverage what it learned during its own IT transformation to help clients migrate their applications to modernized infrastructure platforms.
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This could have longer-term ramifications from a strategic standpoint, said Charles King, principal analyst at Pund-IT. This is obviously a large-scale data-center consolidation effort. It can actually result in the creation of new best practices and processes, and presumably HP could take the experience that it gains from…