CHART: HP's Toughest Problem Is NOT Its PC Business
But HP's consulting business, Enterprise Services, continues to struggle.
While the PC unit looks like it might be out of the woods, it also had a low bar to hit. Its two quarters of growth followed seven straight quarters of revenue declines. And the year-ago quarter was particularly bad, with HP posting a 20% revenue decline. Shortly after that, CEO Meg Whitman replaced the guy in charge, Todd Bradley, with Dion Weisler.
PC sales were also helped a lot this quarter by the end of support of Microsoft Windows XP. Enterprises that had been dragging their feet on buying new PCs got into gear. Business PC purchases were up 12%, making up for the -2% revenue decline from consumers.
Still, as the chart below shows, shared with analysts during iHP's quarterly conference call, the unit looking particularly pale is Enterprise Services.
HP ES is HP's consulting services arm created when HP bought EDS for $13.9 billion in 2008. This was former CEO Mark Hurd's signature acquisition.
The unit has been in a near state of constant restructuring and layoffs ever since. Between 2008 and 2011, HP trimmed 25,000 people from the unit, it said.
Shortly after that, HP began this current round of layoffs, with HP ES a big target, sources have told us.
Now HP announced Thursday that it would be laying off yet more people, 11,000 to 16,000, more, for a new total of 45,000 to 50,000.
Whitman said the addition would come from all business units. But looking at the numbers on that chart, a 7% decline in revenue, a 2.5% profit margin, and a -$12 million dip in year-over-year profits, it's hard to not to see a target on the HP ES unit's back.
- Pathan, Liger, Godfather: Here’s a list of forthcoming movie releases that will decide the fate of the multiplexes
- Taj Mahal continues to lose its sheen due to pollution in the Yamuna and industrial emissions
- ICICI Bank market-cap hits ₹6 lakh crore as its stock rises to a record high
- Jio, Airtel could emerge stronger weakening Vodafone Idea further, say analysts
- Foreign investors pour over Rs 12,000 cr in Indian equity in last 10 days