WinInfo Daily UPDATE--HP Restructuring to Cut 14,500 Jobs--July 20, 2005

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In the News
- HP Restructuring to Cut 14,500 Jobs
- Microsoft Sues Google Over Ex-Executive

==== In the News ====
by Paul Thurrott, [email protected]

HP Restructuring to Cut 14,500 Jobs

HP revealed this week that it plans to cut 14,500 jobs, or about 10 percent of its workforce, by the end of 2006. The cuts will save the company $1.9 billion, the company says.

"Cost structures and revenue growth go hand in hand," HP CEO Mark Hurd said. "We know that only by having a competitive cost structure can we compete aggressively in the marketplace, thereby growing the company for our employees, customers, and shareholders."

Hurd replaced controversial ex-CEO Carly Fiorina about 4 months ago. Since then, he's been working to make HP more competitive in today's low-cost computing environment.

The jobs cuts, although unprecedented in HP's history and certainly painful, are considered necessary by analysts, who fear that the gigantic corporation became too slow moving and entrenched under Fiorina. Fiorina, for her part, refused to take on the epic task of making HP a smaller but more nimble company.

"If you looked at the great days of HP, when things needed to get done, they got done," Hurd said recently in an Associated Press (AP) interview. "This \[restructuring\] was something we needed to get done."

Microsoft Sues Google Over Ex-Executive

I always imagined that Google and Microsoft would find themselves locked in the tight embrace of a bitter lawsuit, but this one surprised me a bit. Microsoft has announced that it's suing Web-search leader Google over Google's recent hiring of an ex-Microsoft executive.

What's interesting about this case is that the former executive, Dr. Kai-Fu Lee, played a key role in the development of Microsoft's Web search technologies. Lee worked at Microsoft's Natural Interactive Services Division (NISD) in China before announcing this week that he's leaving the company. But Microsoft says that Lee's employment contract forbids him from working for a direct competitor for 1 year after leaving the software giant.

"We are asking the Court to require Dr. Lee and Google to honor the confidentiality and non-competition agreements he signed when he began working for Microsoft," the company wrote in a statement. "As a senior executive, Dr. Lee has direct knowledge of Microsoft's trade secrets concerning search technologies and China business strategies."

Google hired Lee to head its new China-based R&D center. China is generally considered the largest emerging technology market in the world. Lee had helped found Microsoft Research Asia (formerly Microsoft Research China) a decade ago.

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