SFChron: HP to cut $1 billion per year

[Tesha]

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/05/18/BUGI1ITK371.DTL

HP to cut $1 billion per year

Palo Alto company is moving to close 84 internal centers

Benjamin Pimentel, Chronicle Staff Writer

Hewlett-Packard will shut 84 data centers and consolidate its internal
information technology operations in a cost-cutting process that the
company says will save $1 billion per year.

The Palo Alto company said it will reorganize its IT infrastructure in
six centers, including five new facilities, in Atlanta, Houston and
Austin, Texas.

The consolidation underscores CEO Mark Hurd's emphasis on cost-cutting
at HP that has won praise from analysts and helped the company turn its
financial situation around.

Randy Mott, HP's chief information officer, said the move will allow HP
to save on telecommunications, real estate, electricity and other expenses.

"It certainly lowers our costs," Mott said in an interview. "We basically
will save a billion dollars annually on what we spend on IT."

<more>


No mention of the number of jobs to be cut, but you can bet it will
be substantial given the decrease in number of sites and the $1B
expected savings.

The Bush economy just rolls on (over the workers)...

Tesha

[Psephos]

1. Job cuts are inevitable, but long overdue

HP got fat and redundant in its middle layers with Fiorina's emphasis on fiefdoms organized around marketing, rather than engineering. The hardware business is low-margin and brutal, and HP needed serious reform.

The alternative to not pruning the rosebush is killing the rosebush. How many jobs would be lost then?

Take a look at SGI for a current example of what happens when you ignore the financials, or at Burroughs, DEC, Sperry, Wang, Commodore, and on and on for historical examples.

From a worker's point of view, the key is not to stay employed, but to stay employable. This is triple true in techonology businesses.

Peace.