HP Confirms Enterprise Services Ciber Subcontracting Arrangement

Hewlett-Packard has confirmed that its $22.3 billion Enterprise Services group has entered into a subcontracting relationship that will move a small number of employees to solution provider behemoth Ciber, No. 37 on the CRN Solution Provider 500.

The HP-Ciber confirmation came after Business Insider reported that HP Enterprise Services has "terminated" a number of employees who will be offered jobs in the next few days with Ciber. Business Insider reported that those employees have 48 hours to accept or decline the jobs.

"HP reached an agreement with a strategic labor partner, Ciber, to allow more flexibility in managing labor demands," said HP 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."

It is not unusual for HP's Enterprise Services group to enter into subcontracting relationships with other system integrators.

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The subcontracting deal comes with Hewlett-Packard aiming to take $2 billion in costs out of its enterprise services business over a three-year period.

HP CEO Meg Whitman, for her part, sounded a positive note on the Enterprise Services business turnaround during the most recent earnings call.

"In Enterprise Services, we are turning the corner in what has been one of the most critical parts of the turnaround," she said. "ES significantly improved its sequential revenue trajectory and delivered another quarter of sequential and year-over-year profit improvement."

Ciber has undertaken a reorganization of its own since Michael Boustridge took over as CEO from David Peterschmidt in June 2014. In his first year on the job, Boustridge has implemented a $27 million restructuring plan, which included laying off 280 people, or 4 percent of Ciber's workforce.

Earlier this month, Ciber unveiled a tool that it expects to save businesses massive amounts of time by automatically reconfiguring applications for a cloud-like environment. Boustridge believes Ciber Momentum will become a $200 million offering by 2018 for the solution provider, which currently does $1 billion of business each year.

Michael Novinson contributed to this story.