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HP to cut 9,000 jobs in wake of EDS acquisition

by Scott Bicheno on 1 June 2010, 14:49

Tags: Hewlett Packard (NYSE:HPQ)

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Human obsolescence

Not long after HP announced the acquisition of IT services giant EDS it revealed it had managed to save a billion dollars a year on its own IT operating costs by using the latest technologies and their attendant efficiencies.

A year or so down the line and the two events seem to have combined to allow HP to get shot of 9,000 now superfluous jobs, as it announced the full automation of its data centres using its own ‘converged infrastructure' and the elimination of overlaps resulting from the EDS acquisition.

"Over the past 20 months, we focused on integrating EDS and improving profitability," said Tom Iannotti, SVP and GM 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."

While this is being reported with an emphasis on the job-losses, HP's spin is that it will enable it to reinvest in its enterprise services business, starting with a lump-sum of a billion dollars. There will be a general consolidation and automation of many of its services, which will create a lot of these redundancies.

The job cuts will cost HP $1 billion and take place ofver the course of a few year. HP expects the measure to generate net savings of $500-700 million a year after reinvestment.


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