GM Saves 3,000 HP Employees From HP's Wrath Of Layoffs

[Anonymous]

GM Saves 3,000 HP Employees From HP’s Wrath Of Layoffs
GM has agreed to take 3,000 workers off of HP’s hands.

It’s a move that some are calling "outsourcing in reverse" or "insourcing."

The 3,000 HP employees are people who have already been working for GM.

They’re part of HP’s beleaguered Enterprise Services unit, which has been hit hard by the tech giant’s layoffs. HP is in the process of trimming 29,000 for its workforce, many of them from HP ES.

The 3,000 employees are part of GM’s bigger plan to hire 10,000 people as it brings more tech work in-house.  They will be added to the GM payroll over the next six months, reports Businessweek.

Shifting workers from outsourcing contracts to payroll won’t affect the bottom line for the automaker, GM said. Its larger plans include what it calls "innovation centers." It already announced two of them, to be located in Warren, Michigan, and Austin, Texas, and it will announce two more, GM said.

GM gave HP some good news—a contract to buy a bunch of HP software including its IT Performance Suite, Enterprise Security Suite, and products from HP’s Vertica and Autonomy Software businesses.

The latter two are particularly interesting for GM and HP. Vertica and Autonomy are HP’s entries in "big data" and the Autonomy Software has been a particularly troublesome part of HP’s history.  Previous CEO Léo Apotheker strained HP’s balance sheet when he bought Autonomy for $10.3 billion a little over a year ago.

In May, Whitman told investors that sales of Autonomy were "disappointing" and that former Autonomy CEO Mike Lynch was out the door. Analysts have been bracing for another big writeoff from HP thanks to the Autonomy purchase.

In August, HP wrote down $8 billion of goodwill on its $13.9 billion EDS acquisition. The acquisition of EDS doubled the size of HP and became HP’s Enterprises Services outsourcing unit.

And here’s where it really comes full circle: GM spun off EDS in 1996.

 

HP CEO Meg Whitman

[Author]

October 23, 2012 at 9:27 AM