HP Enterprise Already On The Fritz?

Hewlett-Packard’s consumer-facing business is struggling, and analysts suspect that the impending split of HP to form HP Enterprise is likely to fare better on the market thanks to recent successes of its business services and products. But reports late last week revealed that HP Enterprise may see struggles of its own.

According to CRN, HP Enterprise Services confirmed earlier reports by Business Insider that it has laid off employees as part of a new subcontracting relationship with Ciber. Those employees will be offered a job at Ciber, however.

“HP reached an agreement with a strategic labor partner, Ciber, to allow more flexibility in managing labor demands,” the company said in a statement. “There are a small number of employees who will move from HP to Ciber and become contractors to HP’s Applications Delivery Services organization. HP will continue to own and manage the end-client relationship and overall service responsibility.”

Reports noted that this isn’t the first time HP Enterprise Services has entered into such a partnership. But this time the move occurs as the company prepares to break off Enterprise Services, worth $22.3 billion, into a completely separate entity. HP said it will look to reduce costs of its enterprise unit by $2 billion over the next three years as the company deals with mediocre sales reports.

The company’s most recent earnings data suggests overall weakening performance except for HP Enterprise endeavors. Its fiscal third quarter earnings report published earlier this month found that much of the company’s growth was isolated to storage services, service operations and other corporate tools.

HP CEO Meg Whitman said the company felt “really good about the enterprise server business” during the company’s earnings conference call.

Hewlett-Packard is aiming to complete the separation of HP Enterprise on Nov. 1.

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