HP's Transition to the Cloud Will Cost 9,000 Jobs

13 Comments

Hewlett-Packard (s hpq) said today that it would cut 9,000 jobs and take a $1 billion restructuring charge, spread out through the end of its 2013 fiscal year, as the company seeks to automate its data centers so it can deliver enterprise business services. HP undertook a big data center consolidation push back in 2006 when it cut the number of data centers to six from 85, but this effort will be tied to automating its external-facing data centers, and appears to be an effort to deliver on HP’s vision of cloud computing. From the SEC filing noting the charge:

As part of this multi-year transformation plan, HP intends to (i) invest in fully automated, standardized, state-of-the-art commercial data centers, (ii) invest to facilitate the migration of client applications to modernized infrastructure platforms, and (iii) consolidate the enterprise services business’s commercial data centers, management platforms, networks, tools and applications.

This reads like HP’s gearing up to offer infrastructure or a platform as a service both for itself and for clients. However, the filing isn’t all bad news. While systems administrators and data center personnel may find themselves on the outs, HP expects to replace 6,000 of the positions eliminated with folks in sales, or what it calls “delivery resources.” And HP expects annualized net savings, after reinvestment in salespeople and other efforts, to be between $500 million and $700 million by its 2013 fiscal year, which ends Oct. 31.

Related GigaOM Pro research (sub req’d): Report: Evolution of The Private Cloud

13 Comments

Ranjit Nayak

It is not fair to blame the loss of jobs on Cloud computing as such. Cloud computing calls for investment in new data centers, new technologies, automation capabilities and services.

Examples of investment show up from time to time:

1 – Oracle invests in Data Center – http://hatch.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=501b755a-1b78-be3e-e028-356c38d4fd7d&Month=4&Year=2010

2 – Apple’s Data Center – http://www.datacenterknowledge.com/archives/2010/02/22/first-look-apples-massive-idatacenter/

3 – Savvis expands Chicago data center – http://www.information-management.com/news/Savvis-expands-data-center-10017133-1.html

Ranjit

jd

I didn’t know servers in the cloud ran themselves. That’s amazing!

Rich

@ My Locator: All technology advances tend to eliminate old jobs and create new ones.

fjpoblam

Advances may eliminate some old jobs and create some new ones, but the new ones they create tend to be at a lower skillset level (and hence a lower pay level) than the jobs which were eliminated.

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