5 Companies That Had A Rough Week
The Week Ending Sept. 18
Topping this week's roundup of companies that had a rough week are the 25,000 to 30,000 employees at Hewlett Packard Enterprise facing layoffs as the company prepares for its upcoming split.
Also making the list are Cisco's loss of yet another veteran channel executive; criticism of Microsoft for its aggressive efforts to get consumers to upgrade to Windows 10; Oracle's declining software license revenue; and a major airline whose operations were disrupted by a computer glitch this week.
Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves -- or just had good luck -- check out this week's Five Companies That Came To Win roundup.
HP To Lay Off Up To 30,000 In Restructuring
Hewlett-Packard cut as many as 25,000 to 30,000 workers from its payroll as it takes $2.7 billion in costs out of its Enterprise Services organization.
In addition to cutting costs, the layoffs are designed to reshape Hewlett Packard Enterprise's workforce to better compete in cloud services as Hewlett-Packard officially splits Nov. 1.
The latest layoffs are on top of 55,000 job cuts HP has already undertaken under a restructuring plan that began three years ago. Hewlett Packard Enterprise has indicated that it expects to have 252,000 employees.
Cisco Loses Another Veteran Channel Exec
Surinder Brar, who helped design and run Cisco's channel programs for 15 years, is the latest channel leader to head for the company's door. Brar, who left Cisco last month, told CRN this week that it was "time to move on" and is seeking a position based on his channel experience.
Brar was chief strategy officer for Cisco's Worldwide Partner organization from 2010 to 2014, before shifting to the cloud side that year and becoming chief of partner strategy for Cisco's Cloud and Managed Services Organization. Before 2010, he spent 10 years helping lead the networking giant's channel strategy and programs, including helping to build the company's initial channel strategy in 2001.
Brar is the latest of a number of executives to leave Cisco, including longtime channel chief Edison Peres earlier this year and, more recently, channel chief Bruce Klein, CTO Padmasree Warrior and channel collaborative sales leader Richard McLeod.
Partners Hit Microsoft Over Aggressive Windows 10 Tactics
Microsoft's move to download Windows 10 files to PCs running Windows 7 and 8/8.1 -- even if customers have not signed up for Windows 10 upgrades -- brought criticism from channel partners this week, who warned the practice could create a customer backlash.
The Windows 10 files were included in a recent update in a hidden folder, according to a report from The Inquirer. A Microsoft spokeswoman told CRN that the files are meant to help customers "prepare their devices for Windows 10 by downloading the files necessary for future installation."
Consumers who have not signed up for Windows 10 upgrades were reportedly among those to whom Microsoft delivered the files, although they were downloaded only to devices with "automatic updates" turned on. Partners told CRN that Microsoft overstepped its bounds with the move and could turn consumer sentiment against the new software.
Oracle Q1 Software License Revenue Plunges 16 Percent
Oracle this week touted its 34 percent growth in Platform-as-a-Service and Software-as-a-Service revenue in its first fiscal quarter. But there was no getting around the fact that revenue from new software licenses -- the vendor's bread-and-butter business -- was down 16 percent year over year.
Oracle's PaaS and SaaS offerings account for only 5 percent of its total revenue while new software license revenue accounts for 14 percent. (Revenue for software license updates and product support, which accounts for 56 percent of the vendor's sales, was down 1 percent.)
Throw in Oracle's declining hardware sales, and the company's financial picture doesn't appear so auspicious. The vendor is in a tight race to grow its cloud business faster than its other businesses are shrinking.
Computer Glitch Halts American Airlines Flights
A computer system failure caused havoc with American Airlines flights for about two hours Thursday, delaying some 300 flights at the airline's hubs in Chicago, Dallas-Fort Worth and Miami. The problem meant delays and missed connections for thousands of passengers.
The technical problem, described by the airline as "connectivity issues," was detected around noon ET and caused the airline to halt flights from the three airports starting around 12:30 p.m. ET.
At 2:14 p.m. ET, the airline tweeted that the connectivity problem had been resolved and that flights from the three airports were resuming, according to a CNBC story.l