As Twitter hires, HP fires
- 02 January, 2014 21:06
With the attention given to Twitter's IPO, one might assume that the tech industry is dependent on its success. It isn't. Not even close.
For sure, Twitter's initial public offering in November made some people awfully rich -- the social networking company's market capitalization now ranges near $35 billion and its shares trade at around $65 apiece, more than double the share price of Hewlett-Packard stock.
At best, though, Twitter is likely to remain a mid-sized employer unless it buys a television network with its eventual cash.
Twitter, according to its IPO filing, has about 2,000 employees, and a long list of job openings. Perhaps, in time, it may equal Facebook current workforce of 5,800.
As HP cuts, who is hiring?
Headcount data is from annual reports and represent global headcounts, unless otherwise noted. Few tech firms breakout domestic versus hiring overseas.Apple data does not include 3,100 full-time equivalent workers in 2008, 2,800 in 2010 and 4,100 in 2013. About 42,800 of Apple 2013 employees work in the company's Retail segment. Google 2012 figures include 12,433 from Motorola Mobile and 4,995 from Motorola Home. Google Sold Motorola Home in 2012, reducing its overall headcount. HP 2008 figures include its EDS acquisition. Microsoft data includes 35,000 international in 2010 and 41,000 international in 2013.
The point of showing the Twitter and Facebook employment numbers is to create scale for HP's just announced layoff of 5,000 workers. Relative to HP's total workforce of 317,000, the cut amounts to just 1.5%, but compared to the amount of hiring now underway at Web-based firms, it's a significant hit to tech employment overall.
The question now for HP is whether it can can adapt to overcome slowdowns in the PC, server and printer businesses and resume its revenue growth. If it succeeds at that, HP could add jobs by the thousands and at a speed that would take a Web-based firm years to achieve. On the other hand, it could also shed jobs by the thousands if it fails.
This latest HP layoff plan, detailed in a Security Exchange Commission filing last week, is on top of 29,000 job cuts previously announced by HP CEO Meg Whitman. HP doesn't breakout hiring/firing by region, so it's not known many U.S. workers are affected.
HP's importance to employment goes well beyond its own payroll.
There are thousands of HP-related jobs at resellers, consulting and professional services firms. Many IT professionals have invested careers in HP-specific technologies certifications and training, and HP systems can be found in most Fortune 1000 firms.
At this stage, analysts aren't predicting any specific long-term outcome for HP. They do see a company being hit by some significant changes in the use of devices ranging from PCs to tablets, and in data centers where users are moving more workloads to the cloud.
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.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His email address is email@example.com.
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