IBM circles as HP-EDS layoffs hit
Amid speculation that up to 250 local staff could lose their jobs as HP merges with IT services giant EDS, rival IBM is eyeing its opportunities.
"Any merger or acquisition is disruptive," says IBM Australia-New Zealand CFO Sara Watts told NBR during October. "A number of HP and EDS clients are up for renewal, and we're going to go after them."
While she wouldn't be drawn on commenting on the specifics of HP-EDS strategy, Ms Watts acknowledged that life was easier for IBM's services division after spinning off its printer division (now Lexmark) and selling its desktop computer division to Lenovo in 2004.
"They have the same issues as when we acquired PwC," she says, in reference to IBM's $US3.5 billion purchase of PricewaterhouseCoopers' consulting division, and its 30,000 employees, in 2002. "You have to make sure your consultants aren't seen as trying to flog their own product."
HP announced a $US13.25 billion deal to buy EDS, which has 137,000 staff, on May 13. Shareholders approved the deal August 1. HP New Zealand installed its own directors of EDS New Zealand during October, and the two companies are now moving to the sharp end of implementing their operational merger.
Worldwide job cuts of 24,600 are being made across the two companies - or around 7.5% of their combined workforce - in a bid to save $US1.8 billion in expenses a year.