back to article HP says 'turnaround remains on track', cuts thousands of workers

HP has handed in a tepid set of financial results with a surprise note saying it expects to lay off even more employees, as the company trudges down an unknown path into a new IT world. The company reported revenue of $27.3bn and earnings per share of $0.88 on Thursday, meeting analyst earnings expectations but narrowly …


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  1. Erik4872

    Wow, PC sales actually grew?

    We're HP customers -- we buy a fair amount of PCs, printers, laptops, servers, etc. from them, and I'm sure this latest layoff round is just a small correction. I don't know how many rotating account managers we've had in the last few years, and it seems that anything sales-related that doesn't involve clicking Buy it Now from a reseller has a massive internal bureaucracy attached to it.

    The news about the server division isn't so great though. Despite all things cloudy, we're still purchasing a good number of standalone servers, PCs, etc. for applications that actually need on-site stuff. I'd hate to see them abandon this market, because not everyone is on public cloud or has a data center full of white box servers with the maintenance staff to take care of them. I'm guessing a lot of the bleeding is from the Itanium thing. HP needs to cut its losses and just port HP-UX and the NonStop OS to souped-up ProLiants. Now that they've basically been outed by Oracle for funding the development of Itanium after Intel realized there was no future, I'm sure there are a lot of large customers deciding to go with another vendor while they wait this one out. (It's too bad - I can't imagine the amount of sunk cost HP would have to swallow for abandoning Itanium.)

    The other thing that might be happening with the extra layoffs is knocking off a few layers of management at EDS, or cutting loose some of the people from bad acquisitions like Autonomy. Hopefully they make the right decisions about where to cut -- when you get down to the "individual employee" level, there are some very smart people still working at HP. But like any big company, they collect a lot of dead wood. (That's my unofficial goal for the second half of my career -- don't end up dead wood.) :-)

    1. PowerMan@thinksis

      Re: Wow, PC sales actually grew?

      Unless those PC's are desktops and laptops your business will soon look like HP's. Data Centers are expanding and bursting at the seams due to the horizontal scale-out and low utilization of x86 servers. Despite virtualization efforts there are claims of improvements but I don't how how anybody can claim things have improved with a average utilization of 30%. Data Centers are full of heat producing devices all with redundant power, multiple Ethernet & SAN cables running at 30% - what would your performance report say if you worked at 30% efficiency? How profitable would your business be - staffed at 100% but producing at 30%.

      You should take a look at IBM's new RISC server called Power8. It runs Linux and AIX. It can almost do with their 2 socket 24 core server what it took 60 cores of HP's 4 socket DL580 with the latest IB E7 v2 processor. If you are running software that is price by the core not to mention the data center costs for power, cooling, rack space, switch ports plus all of the software, maintenance and FTE's to support all of this....well, I have seen consolidations of 10:1, 20:1 even 50:1 - that is servers by the way. The article isn't about this but your write-up in support of the company just begged for somebody to step in and comment!

      1. Anonymous Coward
        Anonymous Coward


        LOL, Power sales have been declining even faster than Itanium for at least 4 quarters, basically fell of a cliff, and the Power teams have already been hit by layoffs. Aix doesn't even run on x86 so is doomed. A few years ago who'd have thought Solaris would be the last Unix but SPARC is now the only RISC (lets include EPIC sof simplicity chip growing. Don't believe us commenters, go check the earnings reports for Oracle, HP, and IBM or IDC

        1. PowerMan@thinksis

          Haha - FUD is not reality

          Interesting when people who comment with such authority yet hide behind an anonymous coward id. You've earned your title today because you are just throwing stones to agitate. I'll briefly lay out the facts to refute your cowardly and false statements. 1) Multiple factors are impacting every vendor which are back to back recession's. In Sun's case it goes back to 9/11 which they could never recover from. 2) Management or business decisions - Sun and HP are recent examples. Jonathan Schwartz took a good idea at the wrong company at the wrong time. HP has had a succession of chaos since arguably Carly. The Leo reign was just horrible. If they didn't have full chaos he sure created it. 3) Financial results are disproportional to Technology improvements. As x86 improved - thanks to Itanium input and AMD embarrassing Intel, Linux made it good enough. TCA or Total Cost of Acquisition has become the biggest smoke and mirror game going. Virtualization is the shiny object making it worse. Big Iron vendors like Sun & HP disinvested leaving IBM to carry the RISC mantra. IBM has continued to invest in R&D with Power which has seen increased performance per core (could show you the last 5 generations as a proof point going back to 2001 if you like) and more RAS & virtualization features. Just for fun let's look at Itanium - stuck at 1 & 2 cores running at 1.5 & 1.6 GHz Itanium for years before they finally made the leap to 4 cores. Have they ever officially said Itanium was dead? Word is they will tell customers under NDA but those features are being moved into x86 and to hang on. Oracle - let's see - they have had Intel, AMD, SPARC, SPARC T series, SPARC64 and now it seems they have settled on the latter two although all of the news reports say Oracle reps loathe selling a Fujitsu box regardless if it is best for the customer. Is that because they fear loss of account control or less of a commission? Their T series languished for years at 1, 1.2 and 1.4 GHz while they had 4, 8, 16 cores per socket but they told the world they were the best at everything. When they announced the T5 they called it the "Worlds Fastest Processor" - hmm, Kevin Closson has a nice article shredding this at Don't forget that Power8 will now run Linux in little endian mode as well as big endian mode. It outperforms x86, it has top to bottom security. It's virtualization has zero CVE compared to x86 alternatives. AIX is feature rich and dynamic allowing for many concurrent features not available on Linux. Linux on Power is very good but AIX is best with IBM i being even better. By the way, this doesn't mean a Solaris on SPARC server doesn't run well, isn't reliable...same for HP-UX on Itanium - I respect both technologies. But they don't even compare to Power and x86 with Windows (seriously) with Linux doesn't even get an honorable mention.

          Here is what it comes down to. Power8 is relevant and competitive. It has more RAS, virtualization, security and out performs EVERY platform out there core for core and socket for socket. x86 and SPARC sellers will state .5 vs 1.0 for Oracle (for example) and say Power cost 2X over x86 and SPARC. That is BS and deceptive. Power is not only powerful but efficient. You can allocate just the cores required to a VM and license those. That number will be anywhere from 3-4X fewer than SPARC. For x86, it doesn't matter - virtualization or not because you license the entire server. There are plenty of other articles out there that discuss the truth about this if you look hard enough. Read this for details

      2. Anonymous Coward
        Anonymous Coward

        Re: Wow, PC sales actually grew?

        Look at new IBM servers? The channel is running away from IBM servers, because no one knows how the Lenovo transition will go. I work for a worldwide top distributor and I can tell you everyone who was on the IBM hardware teams took any open jobs they could find.

      3. Anonymous Coward
        Anonymous Coward

        Re: Wow, PC sales actually grew?

        AIX Koolaid drinker. the price-performance on the latest Intel kit far-exceeds anything that IBM is offering. All apps are migrating to x86 and the innovation is taking place there too - VSAN / MSFT Storage Spaces, etc.

        When you deploy AIX you burden your entire infrastructure with the proprietary costs of this system - backup, operating software, storage, warranty, connectivity, FE costs, app licensing. All those burdens are significantly less on non-proprietary hardware.

        I work across the spectrum in operating systems, multiple storage, networking and server platforms - and 30% is very low for best practices: most well consolidated customers are at closer to 60% utilized. I have some shops over 80%, which is becoming the norm.

        The latest Intel Xeon E7v2 chipset in servers like the Dell PE920 and the HP DL580 offers up 60 cores at a fraction of the cost and significant performance bump over IBM's P-Series stuff.

        IBM just can't compete.

        1. PowerMan@thinksis

          AIX Koolaid or TopShelf Liquor!

          Hey anonymous coward, if you only talked about how great your "Intel kit" was then you couldn't be blamed for simply liking what you like. But then you go and start spewing FUD and lies about IBM Power like you are an authority.

          If Intel is so "open", why did Google and 27+ other major companies join IBM in the OpenPower Foundation? That is where innovation is taking place and why? Why, because Intel is actually shutting out partners and stifling innovation as they try to expand and own it all - kind of like Oracle is doing by buying hardware, storage, applications, middleware, OS, support, backup, etc. Unlike Oracle which is in the enterprise, Intel extends from the consumer to commercial.

          OpenPower with Google, Tyan, Mellanox, Nvidia, Samsung, Xilinx, Micron, Hitachi, Ubuntu and more are working on some crazy products that will deliver features and capabilities that stagnant x86 won't know what hit them. If you want to see some innovation go read up on them.

          Do you even know how much a Power server cost? You write like you are just "put off" that there could be an option to your much beloved x86 platform, let alone it be competitive. Your first mistake is pricing a core for core Power server to a x86 server. I don't need a 2 socket 16 core Power8 server to do the same work as a 2 socket 16 core Intel server. But, you (x86 fanboi's) will try to make that comparison all day. Let me point you to the SAP S&D 2 tier benchmark comparing the 2 socket 24 core Power8 S824 server to the 4 socket 60 core NEC server that were both posted at the end of April. The 4 socket IB E7 v2 which you say the "latest Intel kit far exceeds anything that IBM is offering" generated 114,700 SAPS with 20,800 Users vs the 2 socket 24 core Power8 S824 with 115,870 SAPS and 21,212 Users. There are a couple of 4 socket E7 v2 that go up to 135K but you can't dismiss the incredible performance of the "latest IBM kit (actually) far exceeds anything that Intel is offering". The P8 has 4828 SAPS per core compared to just 1912 SAPS for the E7 v2 or should I call it the "latest Intel kit"? If that doesn't work for you how about the SPECint for the 24 core Power8 at 1750 vs 1020 for a 24 core E5 v2 - yes, now I am comparing 2 socket to 2 socket and core for core. SPECfp is 1370 for P8 and 734 for E5 v2 as well. Would you like to hear the SPECEnterprise2010 result? How about that it is 939 EjOPS per P8 core compared to 469 for the E5 v2 core. I could go on and dive deeper into how PowerVM delivers QoS for it's VM's, allows for dynamic changes of cpu, memory and I/O, concurrent updates to firmware and other maintenance, etc, etc. Besides just performance there are the benefits of the integrated stack. Power still uses partners to deliver products like memory, adapters and disk drives - they just ensure they do so at tight tolerances and specification. Further, they test them to work with the hypervisor, OS(es), HA products, filesystems, storage, etc so the user experience is positive and the results are exceptional - doesn't mean they are perfect but anybody who argues a Power server is not reliable has NO experience working with one - I don't know you but can say that without hesitation. You can hate the platform, dislike IBM and love your ugly baby but you don't get to make up the facts.

          Your utilization claims are suspect for sure - some shops over 80%....hmmm, I call BS. If they are x86 I doubt they are virtualized. I think you are trying to be provocative again. I'll do some research for recent studies by all vendors to see what they say is becoming the norm - I hardly believe 80% is. When you respond with more FUD, please provide some links to a vendor or even well known industry bloggers who have discussed this.

          I already refuted your performance claims above showing you just make stuff up to suit your argument. IBM has Power8 servers with price parity to x86 servers - not all of them but definitely in the entry space. When sized for the workload, including the virtualization, OS and 3 years of support they are virtually equal. Just like x86 vendors and the unaware want to do by comparing a 16 core Power to a 16 core x86 server, you also look at the TCA or acquisition price as if that is the relevant factor. It is 1 of about 20 components that make up the solution cost. There is the data center power, rack & cooling costs. LAN & SAN cabling & port costs, OS & virtualization license & support costs, security products like anti-virus, HA or other clustering products like Oracle RAC at $23,000 per core + 22% maintenance per year. Application and middleware costs. You don't want to hear this and won't believe it as you probably do not think the rich pay enough taxes, that America is the cause of the world's problems or that x86 is just as reliable or secure as any RISC/Unix or mainframe platform. But, a properly sized Power solution running Oracle for example against an appropriately sized Intel solution (pick your vendor) with Linux will cost 4X of the Power solution. The server cost is a nit as the largest portion of the TCO is software and we haven't even brought up the increased number of FTE's required to support the proliferation of heat producing toasters in the data center that require non-stop attention to replace disk drives, memory, power supplies - having VM's all over the place as they vMotion themselves as soon as the server see's a increase in utilization - oh, that's right - not your servers because they run up to 80%. Well, every other shop but yours scooter.

        2. IT Consultant

          Re: Wow, PC sales actually grew?

          The reality is is that there are reasons multiple platforms exist. Many companies ARE looking for options as licensing costs skyrocket and security breaches are ever rising. Never mind server sprawl. I'd bet that the 60% utilization number quotes by our anonymous coward friend include virtualization overhead. When organizations need something reliable, scalable and secure, at least they have options. Proprietary? No. Expensive? No. Simply not true. Reliable, secure and scalable? Yes. Sounds to me like a bake-off is in order.

  2. Gannon (J.) Dick

    Turnaround and bend over ?

    This is a new plan ? I'm sure I've heard it before ...

  3. Anonymous Coward
    Anonymous Coward

    As my cubemate said...

    "Nice knowing you".

    Time will tell.....

  4. Anonymous Coward
    Anonymous Coward

    This turnaround is on track?

    HP has made so many stupid acquisitions that's it's no wonder they're still laying off. Meg continues to get a pass and blame everyone else. HP has (another) bad quarter and it's not HP, it's <insert other company name here>. Take some responsibility.

    What's sad is the massive drop in HP quality. Remember when you bought a laser printer with massive toner carts and knew that it would survive a nuclear bomb? I still have a working LaserJet III in the garage, just can't bare to recycle it yet. Now, the toner carts are a third the size, cost more, and the printers use chintzy plastic. We still buy HP servers, but all their custom "value add" hardware seems to cause more problems than it's worth. See Flexfabric. HP, the drivers for this hardware is flaky as hell. No more. Just give me a couple of 10 Gb NICs and let me team is myself.

    1. Bullseyed

      Re: This turnaround is on track?

      I know printing is still an important industry for some people/businesses, but the channel doesn't really give a damn about it anymore. The "new" thing is managed print. A few companies buy a ton of printers and rent them out to companies who need to print things. Those companies pay by the page and the printers phone that data home for billing.

      Plotters and large scale printing is a different story, but home printing just isn't important in this technologically advanced age.

  5. JayXi

    Quality Helps?

    My last HP PC lasted just over a year of infrequent use. It won't boot even though it was the only PC I have that does not have other software installed other that factory-installed bloatware. My last HP Networked Printer also lasted just over a year of infrequent use. It won't go past the self-test. Those two made it almost impossible for me to look at another HP product.

  6. Mr Nobody 1

    The Turnaround is on track.....

    Don't worry - all negative results are still someone else's fault. Revenue is heading south so just in case anyone notices in our next set of results (and starts pointing in my direction), I'll throw another 16,000 bodies in the waste disposal.

    The empress is devoid of apparel.

  7. Anonymous Coward
    Anonymous Coward

    Political Hatred

    Kind of funny seeing all the political hatred and fanboyism. We get it, even if Meg was pooping gold you'd hate her.

    HP (like many Fortune 100 or Fortune 50 organizations) has waaaay too many people. Part of that is from M+A and part of that is just from being a company that existed before the internet era. HP is implemented a global instance of Salesforce CRM and that is going to remove the need for a ton of their employees.

    At the company I work for, we pay people to copy and paste stuff from CRM/quote to ERP/order. We pay people to monitor Outlook mailboxes and sort requests to other team mailboxes, where someone else sorts them to individual mailboxes. It is 2014. That's crazy. But everyone works that way today in the list of top firms that are over 10 years old.

    1. Erik4872

      Re: Political Hatred

      > But everyone works that way today in the list of top firms that are over 10 years old.

      It is a little crazy. However, it does bring up an interesting thought exercise. What would happen if you suddenly cleaned out _all_ these kinds of positions from large companies? I don't think society could handle that kind of shift overnight.

      The entire US middle class economy is based on people collecting a steady paycheck over 30 years to pay back a mortgage on a house. We're starting to see major cracks in that model. The vast majority of people aren't building software startups in their basements. They're getting up every morning, driving to work and performing one of these cut-and-paste jobs. They get paid, pay their mortgage and taxes, and buy things, which makes the larger economy go round. Individual productivity is insane compared to the 60s or 70s -- before computers and email, secretaries were typing memos for managers. There was a whole fleet of management that existed simply to route reports from one layer to another, since there wasn't any email or word processing. I'm guessing that a lot of these previous occupations were absorbed into the cut-and-paste work, but for those who can't even handle that, the options are pretty bad.

      As the number of well-paying jobs decreases, I doubt people are going to become wildly successful entrepreneurs overnight. Most don't have the skills or work ethic necessary. I think for now we should be glad that there are people in these jobs so that the economy doesn't crater overnight. Until we somehow get beyond the necessity to work for money to buy stuff to get companies to make more stuff, I think we're stuck with some inefficiency.

  8. Speltier

    What are all those people doing?

    Nearly 50 000 people laid off? That is 50 000 man years of labor.... I can't believe there are that many cut and paste jobs even in HP. Considering the financial report (if you can believe it, considering this is, after all, HP) indicates flatness, that means there are 50 000 people who management retained that they should not have retained (that is, they are doing nothing at all other than consuming money) or that management is going to reduce work being done on... well, whatever it is you are buying.

    You can't win this one, which is why large companies shy from noticeable layoffs and now go for stealthy nickles and dimes. Any company laying off substantial numbers of employees is either massively shrinking (needs less labor) or is badly managed (failed to use the labor available efficiently). The former is obvious, the latter means the bungling managers at the top need to leave with everyone else. HP claims flat revenue, which implies management has failed and squandered vast cash and human resources. Or perhaps they are trying to placate Wall Street this quarter hoping you will pay top dollar for rusty unsupported hardware next quarter...

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