I had dinner at Penang
with Camille last night and as usual our conversation included a good
dose of office politics and high-tech business trends. We speculated
that in the light of the massive layoffs at HP,
other companies (including the company that we work for) are likely to
follow suit in order to save operating cost. There was absolutely no
basis in our statements, just pure speculation.
Earlier today, I read from Good Morning Silicon Valley
that HP has announced the disbandment of not 1 but 4 of the company's
advanced development group in the wake of retrenching 14,500 employees
off its workforce. Quoting an excerpt from John Paczkowski's blog:
"In disbanding the last group, HP is bidding adieu to legendary Silicon Valley technologist Alan Kay.
A founder of Xerox's Palo Alto Research Center, Kay - who once said,
'The best way to predict the future is to invent it' - was instrumental
in the development of the windowing GUI and modern object-oriented
programming. He envisioned a laptop computer long before the first ones
rolled out and won a Turing Award in 2003 for his work on Smalltalk,
the dynamic object-oriented programming language on which Sun
Microsystems' Java is modeled. Hard to believe HP's cutting him loose.
But it is. According to the company, his research doesn't jibe with
HP's new focus.
Let's analyze this announcement from several perspectives. From a
public relations point of view, the disbandment of several research
facilities and departure of a legendary technologist will likely send a
wrong message to its customers and investors that research is no longer
an important activity valued at HP. From an accounting perspective, HP
maybe in deeper financial trouble than we knew when CEO Hurd took over
the company. The shakeup may be inevitably and justified. In strategic
terms, how would this move affects HP's competitive advantage? HP has
always prided itself as an innovator and inventor of many technologies,
the word "Invent" is even written distinctively below the company logo.
Visit their website
and see for yourself. The knowledge lost from the closure of research
facilities and departure of experienced engineers is likely going to
impact HP's ability to create and deliver innovative products in the
long run. On the other hand, if those R&D facilities aren't aligned
well with HP new corporate strategy or producing results that add value
to the company, then reduction in R&D activities in HP makes sense.
In conclusion, I think that the financial state of HP may require the
managers to act quickly to realign its resources and imperatives. But,
regardless of HP's new focus, R&D is still and should continue to
be HP's core competence for a while. I feel that the magnitude and
extent of the recent cut in R&D may actually undermine HP's
long-term growth.