About a year ago, Hewlett-Packard unveiled plans to split into two companies, Hewlett-Packard Enterprise, encompassing software and services, and HP Inc., a PC and printer business. Research activities previously housed in HP Labs would go with the business units. That split will become official on 1 November.
Today, the company announced that this restructuring will involve reducing the workforce by 25,000 to 30,000 people, or 10 percent. Most of those jobs will be eliminated on the Enterprise side.
The statement released by HP indicated that Tim Stonesifer, who will become chief financial officer of Hewlett-Packard Enterprise, is aiming for US $2.7 billion in annual cost reductions, mostly coming from those staff cuts.
As part of the announcement, HP CEO Meg Whitman turned the spotlight on the company’s cloud strategy, indicating that cloud revenue would be $3 billion, and expected it to grow 20 percent annually. (Indeed, the company has indicated that some of the layoffs would be offset by new hires, to “reshape the workforce.”) This sounds a lot like IBM’s recent efforts to “rebalance” its workforce to focus on the cloud. It appears to be getting crowded in the virtual skies.
For an analysis about the potential impact of HP’s restructuring on its laboratories, see “Hewlett-Packard Splits Again: But What About the Labs?”
Tekla S. Perry is a senior editor at IEEE Spectrum. Based in Palo Alto, Calif., she's been covering the people, companies, and technology that make Silicon Valley a special place for more than 40 years. An IEEE member, she holds a bachelor's degree in journalism from Michigan State University.
