HP to slash 9,000 jobs as part of $1 billion restructuring

Computer giant Hewlett-Packard has announced today that is planning to cut 9,000 services jobs and replace its semi-robotic workforce with something much more automated.

The area subject to the chopping board will be enterprise services, particularly the parts of the company that have been integrating consultancy and services business EDS which HP bought back in 2008. This will be part of a wider restructing of the entire company that may come with a hefty price tag of $1 billion.

When HP originally bought EDS it said there would be 24,600 jobs cut from its forces over a period of three years. It’s around two years since then, so potentially these 9,000 job losses are part of that larger tally, but HP has yet to confirm that. What it has confirmed, however, is that the new job cuts will come over a further period of years and that the numbers are about standard, or even less, than other businesses  who are using the hatchet much more liberally.

Automation is the way forward, with HP foreseeing the services industry being dominated by automation within the next five to ten years. “The real value to the client comes through automation,” said Ann Livermore, executive vice president of HP’s Enterprise Business division. 

This may be true to some extent, but it’s entirely dependant on a static services model that will be unable to deal with the subtleties of human experience. While an automated system will not be able to fail like a human can, unless there is a bug or power cut, it will also not be able to adapt to the situation if something unplanned for arises.

HP is planning to spend its saved expenses, which may be as high as $500 million or $700 million, on cloud computing and hiring some 6,000 people for a new services business within the cloud computing sector. No other details have been revealed on that, but clearly HP sees great potential for added revenue in that field.