HP Jettisons 8 Percent of Workforce, Refocuses Priorities

By Michael Feldman

May 24, 2012

This week HP announced it will slash 27,000 workers from the payroll over the next couple of years as part of a company-wide restructuring. When complete, the effort is expected to generate between $3.0 to $3.5 billion of savings per year. The workforce reduction is the largest in the company’s 73-year history and reflects how far HP has drifted into unprofitable businesses.

“This is the beginning of a turnaround,” said HP CEO Meg Whitman, speaking about the restructuring strategy on CNBC. Despite the severe cutbacks announced this week, the recent quarterly earnings report was fairly upbeat. Compared to a year ago, sales and profits are down, but the company still managed to post a $1.6 billion profit in this last quarter, which was more than analysts had expected. Combined with the layoff announcement, Wall Street responded with approval, boosting HP’s stock by nearly 12 percent.

But the company has been slipping and sliding for the past few years as some of its businesses have foundered, while it spent billions buying up others (just since 2009: IBRIX, 3COM, Melodeo, Palm, Stratavia, 3PAR, Fortify Software, ArcSight, Autonomy, and Hiflex). Meanwhile, corporate leadership has been trying to figure out which areas of its diverse portfolio of hardware, software and services it needs to focus on.

According to Whitman, who joined the company last September, the big problem child has been the enterprise services group, a business HP inherited when it bought EDS in 2008. “Were in a transition from a lower growth, lower margin segment of that business to where we want to be in two or three or four years,” she said.

Whitman said the services group needs to be leaner and deliver higher value offerings. She conceded that such a strategy will shrink that business (currently around $26 billion per year) and contribute less to HP’s bottom line. The idea though is to make it profitable, which is not the case today.

According to the CEO, the company’s other four main business lines — personal systems, imaging/printing, software, and enterprise storage, servers and networking (ESSN) — should all be in growth mode. That wasn’t the case for the quarter just ended, where only the software business showed robust growth (22 percent year over year), with the ESSN business, in particular, taking a dive (down 5.5 percent). The was attributed, in part, to the recent world-wide shortage of hard drives. Longer term, though, HP looks to expand in all of these segments.

That doesn’t necessarily mean HP will be giving them equal attention. According to Whitman, the growth areas they will target include big data and analytics, cloud computing, security, and application modernization. She said that will involve investments in R&D as well as productivity tools for HP’s workforce. Whitman declined to specify exactly how much of that $3.0 to $3.5 billion of annualized savings would be plowed back into the company versus just adding to the bottom line, saying only that the “majority” of the money would be invested. HP’s R&D budget is around $3.2 billion per year, a value some analysts have pointed out is too small to compete with other large enterprise IT players like IBM.

Some of this additional investment could end up in HP’s high performance computing (HPC)business, but don’t count on it. Whitman said they are not intending to spread the money around the company in “peanut butter” fashion, with a little dollop for everyone. Instead, their intention is to invest strategically in certain growth areas, especially big data and cloud. “We’re going to make a small number of very big bets,” she explained.

HP doesn’t break out its HPC revenue from its ESSN sales, which totaled over $22 billion in 2011. But if you can believe IDC’s HPC server revenue numbers, which had HP at $3.3 billion last year, it represents a sizeable chunk of the company’s enterprise business. HP and IBM share about two-thirds of the HPC server market, more or less evenly, so any investment (or defunding) in HPC could disturb that dynamic. At some point soon, Whitman and company will have to ask themselves if they think HPC is one of those growth areas worth investing in.

The larger question for HP, though, is existential. What kind of company does it want to be? Right now HP develops and sells everything from printer ink cartridges to supercomputers. (Amazingly, it does both of those rather well.) And as of today, HP’s roadmap includes a new tablet computer and an exascale machine. No other company on the planet can make that claim.

But in an era where technology enables smaller and more nimble companies to compete at the same level as their largest competitors, it’s hard to imagine that a be-everything-to-everyone approach is a sustainable strategy. Like, its competitors IBM and Apple have already done, HP needs to decide if it wants to be an enterprise IT company or a consumer IT company. This week’s rejiggering of the organization may refocus some of HP’s priorities, but that larger decision awaits.

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

HPE Wins $57 Million DoD Supercomputing Contract

February 20, 2018

Hewlett Packard Enterprise (HPE) today revealed details of its massive $57 million HPC contract with the U.S. Department of Defense (DoD). The deal calls for HPE to provide the DoD High Performance Computing Modernizatio Read more…

By Tiffany Trader

Topological Quantum Superconductor Progress Reported

February 20, 2018

Overcoming sensitivity to decoherence is a persistent stumbling block in efforts to build effective quantum computers. Now, a group of researchers from Chalmers University of Technology (Sweden) report progress in devisi Read more…

By John Russell

Fluid HPC: How Extreme-Scale Computing Should Respond to Meltdown and Spectre

February 15, 2018

The Meltdown and Spectre vulnerabilities are proving difficult to fix, and initial experiments suggest security patches will cause significant performance penalties to HPC applications. Even as these patches are rolled o Read more…

By Pete Beckman

HPE Extreme Performance Solutions

Safeguard Your HPC Environment with the World’s Most Secure Industry Standard Servers

Today’s organizations operate in an environment with ever-evolving threats, and in order to protect themselves they must continuously bolster their security strategy. Hewlett Packard Enterprise (HPE) and Intel® are addressing modern security challenges with the world’s most secure industry standard servers powered by the latest generation of Intel® Xeon® Scalable processors. Read more…

Intel Touts Silicon Spin Qubits for Quantum Computing

February 14, 2018

Debate around what makes a good qubit and how best to manufacture them is a sprawling topic. There are many insistent voices favoring one or another approach. Referencing a paper published today in Nature, Intel has offe Read more…

By John Russell

Fluid HPC: How Extreme-Scale Computing Should Respond to Meltdown and Spectre

February 15, 2018

The Meltdown and Spectre vulnerabilities are proving difficult to fix, and initial experiments suggest security patches will cause significant performance penal Read more…

By Pete Beckman

Brookhaven Ramps Up Computing for National Security Effort

February 14, 2018

Last week, Dan Coats, the director of Director of National Intelligence for the U.S., warned the Senate Intelligence Committee that Russia was likely to meddle in the 2018 mid-term U.S. elections, much as it stands accused of doing in the 2016 Presidential election. Read more…

By John Russell

AI Cloud Competition Heats Up: Google’s TPUs, Amazon Building AI Chip

February 12, 2018

Competition in the white hot AI (and public cloud) market pits Google against Amazon this week, with Google offering AI hardware on its cloud platform intended Read more…

By Doug Black

Russian Nuclear Engineers Caught Cryptomining on Lab Supercomputer

February 12, 2018

Nuclear scientists working at the All-Russian Research Institute of Experimental Physics (RFNC-VNIIEF) have been arrested for using lab supercomputing resources to mine crypto-currency, according to a report in Russia’s Interfax News Agency. Read more…

By Tiffany Trader

The Food Industry’s Next Journey — from Mars to Exascale

February 12, 2018

Global food producer and one of the world's leading chocolate companies Mars Inc. has a unique perspective on the impact that exascale computing will have on the food industry. Read more…

By Scott Gibson, Oak Ridge National Laboratory

Singularity HPC Container Start-Up – Sylabs – Emerges from Stealth

February 8, 2018

The driving force behind Singularity, the popular HPC container technology, is bringing the open source platform to the enterprise with the launch of a new vent Read more…

By George Leopold

Dell EMC Debuts PowerEdge Servers with AMD EPYC Chips

February 6, 2018

AMD notched another EPYC processor win today with Dell EMC’s introduction of three PowerEdge servers (R6415, R7415, and R7425) based on the EPYC 7000-series p Read more…

By John Russell

‘Next Generation’ Universe Simulation Is Most Advanced Yet

February 5, 2018

The research group that gave us the most detailed time-lapse simulation of the universe’s evolution in 2014, spanning 13.8 billion years of cosmic evolution, is back in the spotlight with an even more advanced cosmological model that is providing new insights into how black holes influence the distribution of dark matter, how heavy elements are produced and distributed, and where magnetic fields originate. Read more…

By Tiffany Trader

Inventor Claims to Have Solved Floating Point Error Problem

January 17, 2018

"The decades-old floating point error problem has been solved," proclaims a press release from inventor Alan Jorgensen. The computer scientist has filed for and Read more…

By Tiffany Trader

Japan Unveils Quantum Neural Network

November 22, 2017

The U.S. and China are leading the race toward productive quantum computing, but it's early enough that ultimate leadership is still something of an open questi Read more…

By Tiffany Trader

AMD Showcases Growing Portfolio of EPYC and Radeon-based Systems at SC17

November 13, 2017

AMD’s charge back into HPC and the datacenter is on full display at SC17. Having launched the EPYC processor line in June along with its MI25 GPU the focus he Read more…

By John Russell

Researchers Measure Impact of ‘Meltdown’ and ‘Spectre’ Patches on HPC Workloads

January 17, 2018

Computer scientists from the Center for Computational Research, State University of New York (SUNY), University at Buffalo have examined the effect of Meltdown Read more…

By Tiffany Trader

IBM Begins Power9 Rollout with Backing from DOE, Google

December 6, 2017

After over a year of buildup, IBM is unveiling its first Power9 system based on the same architecture as the Department of Energy CORAL supercomputers, Summit a Read more…

By Tiffany Trader

Nvidia Responds to Google TPU Benchmarking

April 10, 2017

Nvidia highlights strengths of its newest GPU silicon in response to Google's report on the performance and energy advantages of its custom tensor processor. Read more…

By Tiffany Trader

Fast Forward: Five HPC Predictions for 2018

December 21, 2017

What’s on your list of high (and low) lights for 2017? Volta 100’s arrival on the heels of the P100? Appearance, albeit late in the year, of IBM’s Power9? Read more…

By John Russell

Russian Nuclear Engineers Caught Cryptomining on Lab Supercomputer

February 12, 2018

Nuclear scientists working at the All-Russian Research Institute of Experimental Physics (RFNC-VNIIEF) have been arrested for using lab supercomputing resources to mine crypto-currency, according to a report in Russia’s Interfax News Agency. Read more…

By Tiffany Trader

Leading Solution Providers

Chip Flaws ‘Meltdown’ and ‘Spectre’ Loom Large

January 4, 2018

The HPC and wider tech community have been abuzz this week over the discovery of critical design flaws that impact virtually all contemporary microprocessors. T Read more…

By Tiffany Trader

Perspective: What Really Happened at SC17?

November 22, 2017

SC is over. Now comes the myriad of follow-ups. Inboxes are filled with templated emails from vendors and other exhibitors hoping to win a place in the post-SC thinking of booth visitors. Attendees of tutorials, workshops and other technical sessions will be inundated with requests for feedback. Read more…

By Andrew Jones

How Meltdown and Spectre Patches Will Affect HPC Workloads

January 10, 2018

There have been claims that the fixes for the Meltdown and Spectre security vulnerabilities, named the KPTI (aka KAISER) patches, are going to affect applicatio Read more…

By Rosemary Francis

GlobalFoundries, Ayar Labs Team Up to Commercialize Optical I/O

December 4, 2017

GlobalFoundries (GF) and Ayar Labs, a startup focused on using light, instead of electricity, to transfer data between chips, today announced they've entered in Read more…

By Tiffany Trader

Tensors Come of Age: Why the AI Revolution Will Help HPC

November 13, 2017

Thirty years ago, parallel computing was coming of age. A bitter battle began between stalwart vector computing supporters and advocates of various approaches to parallel computing. IBM skeptic Alan Karp, reacting to announcements of nCUBE’s 1024-microprocessor system and Thinking Machines’ 65,536-element array, made a public $100 wager that no one could get a parallel speedup of over 200 on real HPC workloads. Read more…

By John Gustafson & Lenore Mullin

Flipping the Flops and Reading the Top500 Tea Leaves

November 13, 2017

The 50th edition of the Top500 list, the biannual publication of the world’s fastest supercomputers based on public Linpack benchmarking results, was released Read more…

By Tiffany Trader

V100 Good but not Great on Select Deep Learning Aps, Says Xcelerit

November 27, 2017

Wringing optimum performance from hardware to accelerate deep learning applications is a challenge that often depends on the specific application in use. A benc Read more…

By John Russell

SC17: Singularity Preps Version 3.0, Nears 1M Containers Served Daily

November 1, 2017

Just a few months ago about half a million jobs were being run daily using Singularity containers, the LBNL-founded container platform intended for HPC. That wa Read more…

By John Russell

  • arrow
  • Click Here for More Headlines
  • arrow
Share This