IT Business
Update: HP to slash 9,000 jobs as it completes EDS integration
Twenty months after acquiring EDS, company announces $1bn writedown
By Leo King | IDG News Service | Published 14:30, 01 June 10
HP has said it will cut 9,000 more jobs globally as it restructures its services business, following the 2008 acquisition of EDS.
Ann Livermore, executive VP, said the company would now focus on further automating its services for clients. In spite of the 9,000 job cuts, she said HP would deliver “better services” and “more value” for clients, because of the automation.
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HP said that by the end of 2013, it will deliver up to $700 million savings as a result of the changes.
The company has already faced high profile strike action in the UK over job cuts. Key contracts with the Department of Work and Pensions, the Ministry of Defence and General Motors were all affected in the aftermath of 3,400 job cuts previously announced in the UK.
Livermore said today that staff “understand” what is “best” for the company and its growth. No details are yet available about the UK impact of this latest round of redundancies.
HP will take the savings and reinvest $1 billion (£684 million) in its services business, spending the money on automating and standardising datacentres, approximately halving the number of datacentres from 100. It also said it would consolidate its management platforms, networks, tools and applications.
But it will also take a $1 billion write down in the aftermath of its takeover of EDS some 18 months ago. The company has additionally taken a £270 million hit so far from an EDS court case, where it lost to broadcaster BSkyB over a failed software implementation. HP was forced to restate its finances as a result.
With the EDS merger HP said it was signing more and better services deals, with 50 megadeals signed since the business was acquired. In addition to the job losses, the company also said it would hire 6,000 new sales and “global delivery” staff.
Livermore said automation was key to the future of the IT services industry because customers will focus on “running faster and more efficiently”.
