From CRN: Hewlett-Packard on Thursday told Wall Street analysts that it is aiming to take $2 billion in costs out of its beleaguered $22.3 billion enterprise services business.
The enterprise services cost-cutting plan comes after HP reported that sales in the business were down 16 percent in its fiscal second quarter ended April 30, to $4.81 billion, compared with $5.7 billion in the year ago quarter.
HP's Enterprise Service Group's infrastructure technology outsourcing (ITO) business, which is facing severe pressure as corporations move to cloud computing solutions, was down 20 percent in the quarter.
Customers are moving faster to a "consumption," pay-for-what-you-use IT model that is forcing dramatic changes in HP's enterprise services labor force and in its data centers, said HP CEO Meg Whitman.
"That is going to require us to make a faster mix shift to low-cost resources, and frankly, the transformation of the physical data center footprint to a much more streamlined footprint that is far more automated," said Whitman. "There are real market shifts going on here."
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