What HP's Layoff Plans Could Mean For SMBs

Yesterday's rotten day on Wall Street capped off with a surprise announcement from HP -- that it would be eliminating close to 25,000 jobs, or 7.5 percent of its workforce, in the coming three years.Most of those cuts will come from within EDS, and nearly half will be jobs in the United States, reports BusinessWeek (among a slew of others). As you recall, HP acquired EDS for $13.9 billion just a few months back (in a move some said made sense in light of HP's strategy to move more of its midmarket business into the hands of resellers).

It's all about streamlining for growth and saving a nice chunk of change, around $1.8 billion, HP says. The goal: to create a global workforce that has the right blend of services delivery capabilities to address the diversity of its markets and customers worldwide.

According to an article from San Jose Mercury News, despite the layoffs HP will also be creating thousands of new jobs with a calling to increase sales and serve new markets. The article also says that in anticipation of the announcement (guess not everyone was surprised?), rival IBM announced "a new package of incentives for customers that move to IBM."

Says ZDnet's Larry Dignan: "If HP is targeting IBMs services business, Big Blue apparently figures itll target Hurds server unit. IBM already has a program to migrate customers of HP, Sun and other platforms, but has expanded it to System z mainframes. The strategy: Force HP to compete more on price in its core hardware business and upend the companys Itanium server lineup."

Cost to customers to make "z" upgrade? Zip.

On second thought, maybe HP's plans aren't so rotten after all. As the big guys duke it out over market share, they'll no doubt try to one-up each other with better services at more attractive (read: cheaper) prices. For SMBs, that prospect seems pretty sweet.