October 18, 2012, 8:38 PM — HP has agreed to transfer 3,000 of its employees to the General Motors payroll, as the automaker moves IT operations in-house, the two companies announced Thursday.
GM CIO Randy Mott said the car company hopes to add the HP workers, part of a team running GM's IT operations under outsourcing contracts, over the next six months.
Mott, named CIO of GM earlier this year, decided early on in his tenure to bring most of the automaker's IT work in-house, a major shift for a company that has long relied on outsourcers.
Under Mott, GM is consolidating and automating IT operations and plans to use the savings to work on innovating its product lines and business operations.
GM plans to reduce its worldwide data center roster from 23 to two within three years, as well as cut the number of its applications by about 40% "as we drive more application commonality and common processes across GM," said Mott.
In a conference call, Mott said the former HP employees will see their jobs "changing pretty rapidly over the course of the transformation," as the company feels that it's important that the workers become "well-integrated into the GM team."
This new focus on IT innovation will be accomplished in a "really self-funded" way using savings generated by consolidating the data centers and automating "standard IT functions," Mott said.
The HP employees to be offered jobs are based in the U.S. and already support the automaker's business systems, Mott said.
Despite the loss of outsourcing agreements, HP will continue to have a major role at GM under the new agreement.
The contract calls for the expanded internal GM IT operation to rely on HP software, including the networking, operating and monitoring software in the IT Performance Suite.
GM also agreed to use HP's Enterprise Security Suite, and the data analytics and business intelligence software in the Vertica and Autonomy Software product lines.
The value of new software contract wasn't disclosed, though George Kadifa, executive vice president, HP Software, said "this is the largest deployment of our full product portfolio in the world, second to none, at this stage."
HP will also continue to provide some services to GM.
"There is a good chunk of employees that will stay with HP that will continue to provide services to General Motors," said Mike Nefkens, acting global HP enterprise services leader, during the conference call.
GM has for decades relied heavily on outsourcers to run its data centers and to write and manage its applications. A major part of this work was contracted to the former Electronic Data Systems, which was acquired by HP in 2008.