Struggling HP posts $92.5m NZ losses

The New Zealand subsidiary of American computer giant HP has reported a $92.5m loss for the year to October, as company fortunes worsen.

With revenues crashing 12% to $647m, the Kiwi section of the company was doubly worse than in the U.S., with shares fallings 6% overnight.

The company endured a notably tough 2012 across the globe, but failure to secure work with both government and public sector companies within New Zealand has been attributed to the poor results.

"We are having a 'rebalance' in the marketplace around the way in which customers manage their own capability, and there is a swing to 'in-sourcing' or 'right-sourcing'," says Adam Dodds, IDC Research,

"At the same time there is a technology shift going on affecting the 'old world' models around deploying and supporting desktops, middleware and infrastructure - all of those 'legacy' activities.

"HP is caught up in the storm and until they figure out where they have got depth of capability, it is going to be pretty hard for them to move forward."

With staff numbers now standing somewhere between 1,500 and 2,000 within New Zealand, Dodds believes a lack of clear management has also affected the company's fortunes, since the EDS merger in 2008.

"When you look at HP in New Zealand from a leadership point of view there has been a bit of a challenge in that space," he says.

"It was unclear who reported to whom."

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