HP Says to Accelerate Job Cuts by 2016

HP Says to Accelerate Job Cuts by 2016

HP Inc said it was accelerating its restructuring programme and now expects about 3,000 people will exit by the end of fiscal 2016 instead of over three years as it announced in September.

Then, Hewlett-Packard Co had said it expected to cut about 33,300 jobs over three years, of which up to 3,300 were to be cut in HP Inc. It said then that 1,200 people would leave the company by the end of 2016.

The restructuring will result in charges and associated cash payments of about $300 million (roughly Rs. 2,055 crores) in the current year, the company said.

“This move is basically HP Inc embracing the tough pricing environment and shifting their focus to building their portfolio,” says Shannon Cross, an analyst for Cross Research.

HP Inc, which houses former Hewlett-Packard Co’s legacy hardware business, reported a near 12 percent drop in quarterly revenue, as it struggles with weak demand for PCs and printers.

Revenue in the company’s personal systems business fell 13 percent in the first quarter ended Jan. 31, while it declined 17 percent in its printing division from a year earlier.

PC sales have been falling sharply worldwide, and the launch of Windows 10 has so far failed to rekindle demand.

Printer demand has been hurt as corporate customers cut printing costs and consumers shift to mobile devices.

The company, which is reporting results independently for the first time since being spun off from Hewlett-Packard Co, forecast adjusted profit of 35-40 cents per share for its second quarter ending April 30.

Analysts on average were expecting 39 cents, according to Thomson Reuters I/B/E/S.

HP Inc maintained its 2016 adjusted profit forecast at $1.59-$1.69 per share.

The company’s earnings from continuing operations fell to $650 million, or 36 cents per share, in the first quarter from $770 million, or 41 cents per share, a year earlier.

Revenue fell to $12.25 billion from $13.86 billion.

Analysts on average had expected earnings of 36 cents per share and revenue of $12.20 billion.

HP Inc’s shares were marginally lower at $10.75 in extended trading on Wednesday. They had fallen more than 13 percent since the spinoff in early November to Wednesday.

Hewlett-Packard Enterprise Co, also spun off from Hewlett-Packard Co, is expected to report results on March 3.


Start-ups have limitations in traditional business, says Capgemini India CEO

Photo: AFP

Photo: AFP

New Delhi: Srinivas Kandula, chief executive officer of Capgemini India, and Patrick Nicolet, member of the Capgemini group management board, spoke about the integration of iGate’s business with Capgemini, future areas of focus for the India unit and the challenge from start-ups, on the sidelines of the Nasscom Leadership Forum in Mumbai. Edited excerpts from an interview:

Can you update us regarding the integration of iGate and the plans for the India unit?

Srinivas Kandula: With iGate integration, we are 88,000-strong now in India. iGate no longer exists as a brand now. We are done with the first phase of the integration. There are certain core processes, which have to be integrated and that work is on right now.

Also, we are driving transformation, which is closely linked to the competitiveness agenda that the firm is driving. Globally, Capgemini will go through a certain transformation and since India is almost 50% of the workforce, we are beginning the drive with India.

Patrick Nicolet: India is the backbone of the group and half of our headcount is in India. Capgemini has a multicultural approach to business and we want to provide the same to all our colleagues here in India.

We are trying to build capabilities around innovation, client experience and leadership.

If our colleagues here are not connected to the clients, then we miss the point that is driving change for customers in the markets; so it’s absolutely necessary that our employees are connected to the clients; otherwise, they will miss out on these trends in the market.

On the client experience side, today, we are organized in India by business lines. We are now working on the model of One India, projecting the group and not just the particular business line that the client is dealing with. We must make sure that they have a Capgemini Group experience and not just Capgemini banking or insurance experience.

Will there be more focus on digital going ahead, especially with iGate integration?

Srinivas Kandula: Capgemini has a strong focus since beginning on analytics, digital or cloud. With the integration of iGate, there is strong product in ITOPS which is cutting across industries whether it’s banking, retail etc. Given the muscle of Capgemini in terms of market reach, those solutions will be better utilized and monetized in the coming days.

Are you looking at hiring more people this year and what skills would you be looking at?

Srinivas Kandula: We are looking at both traditional skills as well as the emerging technologies. There is a competitiveness and transformation agenda that the company is working on, so the profile of skills will undergo some change. We are looking at the numbers and we will have clarity in the coming weeks, but we will definitely grow this year.

Are you facing disruption from start-ups and are you looking at collaborating with start-ups for innovations in digital?

Srinivas Kandula: Start-ups can disrupt on the product side but in the traditional business, I see a great limitation for start-ups, because you need to have a certain scale, project management maturity etc. You cannot have one fine idea that can drive the entire IT services industry, it is a comprehensive model and comprises of various parts.

On the big data, analytics, cloud side, we have our own startup culture, where we encourage ideas. We have an innovation exchange within the company and people do collaborate with startups.

Recently, the US government hiked visa fee, which is expected to hurt Indian IT companies. Are you seeing any impact of the move?

Srinivas Kandula: In the overall scheme of things, there is not too much of an impact. But it is cause of concern, the frequent changes to the immigration policy. We have requested Nasscom to take this up with the US government.

Whenever you have new process, new fee structure, you have to alter everything. We do business assuming certain level of consistency in policy. Also, there is the financial impact when you revise upwards the fee. The intent of fee raise is not to earn revenues for the government but to discourage.


Consumer Internet, e-commerce most preferred sectors for start-ups, study says

A file photo from the launch of the ‘Startup India’ action plan. The study shows that more than 5,000 start-up jobs are expected to be created by about 130 start-ups in the next 12 months. Photo: PTI

A file photo from the launch of the ‘Startup India’ action plan. The study shows that more than 5,000 start-up jobs are expected to be created by about 130 start-ups in the next 12 months. Photo: PTI

Mumbai: Consumer Internet and e-commerce companies have emerged as the most preferred industry segments across start-ups, according to the India Startup Outlook Report 2016, released by venture debt firm InnoVen Capital on Friday. The report also maps key trends in funding, hiring, opportunities and challenges for 2016 in the start-up ecosystem.

Delhi emerged as the most sought-after location for starting new ventures, followed by Bengaluru and Mumbai.

The report said 44% of companies backed by venture capital (VC) firms believe that access to equity is one of the greatest opportunities for the sector. In FY2016, more than 50% bootstrapped start-ups and 45% angel-funded start-ups expected to turn profitable, whereas only 22% VC-funded companies expected to turn profitable. The report said 130 companies are expected to raise $700 million in the next 12 months.

Also, 97% start-ups felt they were likely to hire new employees, where on an average, 28% would be on the technology front. The study shows that more than 5,000 jobs are expected to be created by about 130 start-ups in the next 12 months.

The report also highlights that there has been gender diversity in the workforce of start-ups. 41% of the VC-funded start-ups had women founders or CEO-level executives, while this number stood at 31% for boot-strapped ventures and at 29% for ventures with angel funding.

While the size of the domestic market, proximity to customers and suppliers are the top factors that make India’s business environment conducive to entrepreneurship, there have been challenges as well. Taxation, work ethics and regulation topped the list . 74% of bootstrapped and angel-funded companies were not aware of angel tax as per section 56 of the Income Tax Act.

More than 70% respondents believed the Indian education system was not preparing future employees with the skills their business needed. Overall, 65% of all companies felt current business and political conditions are better than last year and 76% expect next year to be even more favourable for start-ups.

The findings of the report are based on a survey conducted by InnoVen Capital, which captures responses from start-ups across industries and funding stages, to map the key trends, challenges and opportunities in the industry.


Counterpoint ‘Grossly Underestimated Our Numbers’, Says Xiaomi India Head Manu Jain

Counterpoint 'Grossly Underestimated Our Numbers', Says Xiaomi India Head Manu Jain

Less than 24-hours after the Counterpoint Research’s Market Monitor analyst report stated thatMicromax’s Yu is outselling Xiaomi online, and that Xiaomi registered a 46 percent drop in smartphone shipments (its first-ever drop in the country), Xiaomi has issued a counterpoint of its own by saying it sold record 1 million plus units in Q2 (July to September).

Addressing this difference directly, Xiaomi India head Manu Jain says that the company does not track analyst reports regularly but adds that there have been some changes to Xiaomi’s business in recent times which could explain the discrepancy, saying, “they [have] grossly underestimated our numbers”.

“For one thing, the numbers we report are units sold, not just shipped, and I’m not sure if this is the case for the other brands, which should explain some of the difference,” says Jain. “The million mark we are announcing today is phones sold.”

Another reason for the discrepancy, Jain says, could be in the fact that Xiaomi isn’t importing all the handsets it sells in India anymore. “In Q3, we also started our Make in India initiative, and the Redmi 2 Prime, which is manufactured in India is our highest selling SKU right now,” says Jain.

All units of the Redmi 2 Prime, and some units of the Redmi 2 are being made in Foxconn’s Sri City facility, and the rest of Xiaomi’s inventory is still imported. However, Jain was not willing to specify what percentage of its sales comes from the made in India products, so it’s not clear if this could really be why Counterpoint’s data contradicts what Xiaomi is saying.

Xiaomi is bringing more and more products to open sales, Jain adds, as it gets better at managing the demand-supply equation. “We had much more supply-demand disparity when we first came to India, but we have been able to move to open sale for almost all our products,” says Jain. “Demand is still more than we can keep up with some times, but make in India is helping us change this. It’s been much more successful than we were expecting, and I’m hoping that at some point in the future, most of our inventory sold here will also be made here.”

He added that in terms of e-commerce too, Xiaomi has been seeing a strong positive reaction from the audience here in India, and pointed out during the Diwali sale the company started a few days ago, it saw over 1 million unique visits on Mi.com/in in a single day, and added that the store has seen over 10 million visits.