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As Twitter hires, HP fires

Patrick Thibodeau | Jan. 3, 2014
Trends in tech hiring aren't always what they seem.

HP is "getting rid of redundant employees left over from acquisitions and shifting to more of a software focus and adjusting for market changes," said Rob Enderle, principal analyst, Enderle Group, citing printer sales in particular.

Charles King, principal analyst at Pund-IT, said the layoffs likely stem from HP's analysis that some products and/or the performance of some business units "will be weaker than originally projected. That's a fairly common occurrence, especially in an organization as large and complex as HP."

The layoffs also "suggest that the company's turnaround strategy may not be delivering benefits quite as quickly or fully as originally hoped," said King.

Analysts say that HP is hiring as it makes its changes, but net-net, said Neil McDonald, an analyst at Gartner, "there's more layoffs than previously announced."

The company's PC, server and printer businesses are all under pressure, and currently "HP doesn't have a great answer for those trends," said McDonald.

McDonald did note that HP has gained market share and improved its margins in a printer market that overall is decline. It can do the same in other areas, he said.

"The overall market can shrink, that doesn't mean the business can't be profitable for HP," said McDonald.

HP is investing in its cloud offerings, but there are also few companies that will be entirely based in the cloud, with most having hybrid environments, said McDonald. HP can take advantage of with a combination of hardware, software and services that all tie together, he said.

 

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