News & Insights for the AI Journey|Monday, August 19, 2019
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Updated: HP Enterprise Will Cut 25,000 to 30,000 Jobs 

Even before it gets off the ground, HP Enterprise – one of the two companies HP will split into by year’s end – is getting its wings clipped: HP announced plans yesterday to cut 25,000 to 30,000 jobs from HP Enterpise.

It’s not yet clear what this will mean for HP's aspirations and operation in HPC and the larger enterprise space. Sister publication HPCwire reported on plans to build a big data and HPC focused business unit (HP Launches HPC & Big Data Global Business Unit) in June, when its leader Bill Mannel, sounded an all ahead full-speed note.

Early reaction to the layoffs varies. IDC sees the move as mostly a positive for HP to avoid post-split disruption of either of the newly formed companies. “You don’t want to send off the new entities in a bloated fashion because then they are going to get into trouble right away and quickly have to announce job cuts to right-size. This is the right thing to do now,” said Steve Conway, IDC research vice president, HPC/HPDA, via email.

“I’m not saying it’s all fine and good because there’s some pain involved here and it’s hard to say what advantages, if any, competitors get. Any time you trim that number of people, even though it might be the right thing to do, you’re going to lose some capability at least for a time. Competitors will try to take advantage, but from an HPC standpoint I don’t see this weakening HP which has kind of emerged as clear leader in the HPC server market," he added.

It’s still not clear how the move will impact HP stock (NYSE: HPQ) offered Conway.

HP, of course, also has grand aspirations in the broader enterprise market including datacenters and the cloud. One enterprise partner, IT services provider powersolution.com, says it’s too early to know what the impact will be there but offers a caution against cutting technical staff.

“From a partner standpoint, we’ve seen this before. I don’t know if there’ll be any direct impact for us. We’ll have to wait and see,” David Ruchman, chief technology officer at powersolution.com, told EnterpriseTech. “Going backwards a little bit, I think HP is a little late to the cloud game and I think they’re playing a bit of catch-up. HP is behind companies like Amazon, Rackspace, Microsoft in the cloud.

“Will there be an impact? My guess is there probably will be, but what level is hard to gauge at this point," he continued.." [We] won’t know until after layoffs and restructuring are in place. If it’s engineers that’s a huge cut and then HP would somewhat suffer from that because, theoretically, they could fall behind on development of their infrastructure and their development lifecycle but I don’t think they’d do that because they realize it’s a huge market and they want a piece of the action.”

HP’s Mannel had laid out HP’s plans in some detail in the earlier HPCwire report cited above: “It’s not by mistake or coincidence we put HPC and Big Data together,” said Mannel, now vice president and general manager of the HPC & Big Data GBU. “We believe storing big data is one thing and we have technologies to do that. Getting productive use out of [the data] is another thing and many customers are using similar types of technologies to get value out of their big data.”

Hired last November and a key architect of the new GBU, Mannel discussed with HPCwire the HP strategy for expanding its HPC focus, why the timing is right to push into the enterprise, what some of the obstacles (and solutions) are, and the steady rise of new technologies – x86 still dominates (including at HP) but competitors (GPU, FPGA, OpenPower, and ARM) are winning sockets in a trend likely to continue.

EnterpriseTech conducted an interview with Mannel roughly a week ago (HP Enterprise’s Bill Mannel Talks HPC, Intel, Big Data, and More) in which there was no hint of a coming reduction or strategy shift.

It’s not clear how HP the strategy will now change. The cuts bring the total headcount reduction overseen by CEO Meg Whitman since 2011 to around 55,000. Both EnterpriseTech and HPCwire will continue covering the story and its potential impact on HPC and the enterprise.

About the author: Alison Diana

Managing editor of Enterprise Technology. I've been covering tech and business for many years, for publications such as InformationWeek, Baseline Magazine, and Florida Today. A native Brit and longtime Yankees fan, I live with my husband, daughter, and two cats on the Space Coast in Florida.

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