HP Layoffs: Is HP Autonomy Software Business Already Broken?

Amid HP layoffs totaling 27,000 employees, there’s troubling news in Hewlett-Packard’s Autonomy software business. Indeed, “Autonomy saw a significant decline in license revenue” during Q2, prompting HP Chief Strategy Officer Bill Veghte (pictured) to take over that software business. Autonomy founder Mike Lynch will exit the company after a transition period. So what’s the bottom line?

HP’s software business is growing but struggling, and HP can’t afford any more drama at a time when the company is striving to diversify beyond PCs and printer (er, ink-driven) profits. HP paid $10.3 billion to buy Autonomy in 2011, vowing to push deep into the enterprise search and data management markets.

Fast forward to the present and Autonomy is already stumbling while the broader HP shrinks on multiple fronts.

• HP CEO Meg Whitman has announced a plan for HP layoffs totaling 27,000 employees.
• HP’s Q2 revenues fell three percent to $30.7 billion, according to an earnings announcement today. But the results did beat analysts’ conservative expectations.

Back in the software business, HP insists “the market and competitive positioning for Autonomy remain strong, particularly in cloud offerings.” Based on that statement, HP seems to be suggesting Autonomy’s problems involve mismanagement and poor execution.

Now, it’s up to CSO Bill Veghte to fix Autonomy while Whitman focuses on the broader HP.