HPE To Spin Out Its Huge Services Business, Merge It With CSC (cio.com)

itwbennett writes from a report via CIO: Hewlett-Packard Enterprise announced Tuesday that it will spin off its enterprise services business and merge it with IT services company Computer Sciences Corp. (CSC) to create a company with $26 billion in annual revenue. The services business "accounts for roughly 100,000 employees, or two-thirds of the Silicon Valley giant's workforce," according to the Wall Street Journal. In a statement, HPE CEO Meg Whitman said customers would benefit from a "stronger, more versatile services business, better able to innovate and adapt to an ever-changing technology landscape." Layoffs were not a topic of discussion in Tuesday's announcement, but HPE did say last year they would cut 33,000 jobs by 2018, in addition to the 55,000 job cuts it had already announced. The company also split into two last year, betting that the smaller parts will be nimbler and more able to reverse four years of declining sales.

Comments

The remaining 1/3 will turn off the lights.

[zapatero]

They spun of 2/3 of the company? The enterprise services? They already spun out all manufacturing to HPQ. What's left? Reselling VMWare?

Re:The remaining 1/3 will turn off the lights.

[Viol8]

"We're still a major player in hardware"

Yeah, just not "printers, laptops, notebooks, desktops and workstations, and a lot more", you know, the things that actually make money...

"We make servers, from smaller rack servers up to huge Enterprise scale servers. We make storage hardware, network hardware, etc. Basically, if it's something you'd find in a corporate data center, we make it AND support it"

You're still a runt of a company hived off from a once great corporation. No one cares about HP big iron any more, that died when HP decided HP-UX was yesterdays news and x86 was the way forward. Its IBM , Oracle or Dell + [linux distro of your choice] now.

Re:Is a asset stripper in charge?

[SeaFox]

Not so sure HP has been a "great company" for some time.

I wonder what sort of debts they will try and push onto whatever this remainder-of-HPE company is going to be. Gotta find a way to get that "clean slate" by scuttling the old ship with undesirably consequences of past leadership's transgressions, not to mention least favorite people. Those brave souls who remain will steer the old wreckage to the bottom of Bankruptcy Bay. A few will plan golden life rafts to escape the undertow that pulls hapless stockholders down with it.

Re:Those who don't learn from history...

[Opportunist]

It's restructuring. It's what company managers do when they notice that their revenues plummet and they somehow try to hold on to their comfy chairs, which they could not if it seems like they do nothing to deal with the plummeting revenue.

Once they notice that they can't do anything sensible (usually after spending a million or two on consulting, which usually makes me wonder what the fuck these goofballs are doing if they need someone telling them what to do any time a serious decision that goes beyond choosing the correct iron on the golf course is due), they need to do SOMETHING to appease shareholders.

Restructuring is perfect for this. One, it looks like you're doing something, two, it makes you look like you know what you're doing and three, it may cost whatever it costs because, hey, restructuring takes time and costs money, everyone knows that. But afterwards it's going to be SO much better that the new revenue boost will easily recover this in a year. Two, tops.

And two years later, you have a new CEO.