July 22, 2005 8:14 AM PDT

HP cuts research projects, loses tech visionary

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Shortly after announcing that it was determined to maintain its investments in research and development, Hewlett-Packard said Thursday it is discontinuing four projects at its Cambridge, Mass., and Palo Alto, Calif., research facilities.

HP also confirmed that Alan Kay, one of the leading lights in the development of the personal computer and object-oriented programming languages, is leaving the company.

On Wednesday, HP announced that it was undertaking a massive restructuring and losing 14,500 jobs--around 10 percent of its work force--but said that it may take up to 18 months to complete the cuts because of labor laws in Europe and elsewhere. At the same time, the company said it was remaining focused on R&D.

It now appears the company's research-centered labs are among the first to be hit, with around 10 percent of that unit's work force, about 70 people, being laid off.

The labs' staff cuts are proportional to those in other departments being trimmed in the restructuring, HP spokesman Dave Berman said. They also reflect a shift in research priorities for the company, he said. For instance, the company is moving away from research on health and wellness technology, which is the focus of its Cambridge Research Laboratory project, Berman noted.

The other three units on the cutting-room floor are the Consumer Applications and Systems Laboratory; the Emerging Technologies Laboratory, which worked on high-density, portable storage; and the Advanced Software Research team, which was looking into a new operating system for the Internet and was run by Kay. The teams working on those three projects are based mainly in Palo Alto.

HP will also trim the group's budget, but Berman declined to specify the extent of the budget cuts.

Berman stressed that research will remain a high priority at HP. The company spent more than $3.5 billion on research and development last year, he noted. The labs spent just a small portion of that sum, with business units consuming the majority, he said.

"The fact that we have trimmed some of these projects doesn't mean we aren't completely committed to a very vital R&D program," Berman said. "We still have a very extensive research portfolio, and these cuts enable us to put more resources into projects we think will be of most benefit to the company."

Research areas that will continue to be a focus for HP include business technologies, such as utility computing, radio frequency identification, printing and imaging, nanotechnology and quantum computing, Berman said.

Kay has a long and distinguished record in the IT business. He's best known for his work at Xerox's Palo Alto Research Center, or PARC, in the 1970s, where he helped develop the graphical user interface that became the basis for the Mac, and for his work on the Smalltalk language, which became the basis for object-oriented programming.

Kay joined HP in 2002 as a senior fellow. He did not immediately return calls for comment.

Kay has won several awards for his research. He joined HP in 2002. He has also worked at Apple Computer and Walt Disney Imagineering.

HP Labs has six sites worldwide, including one in Bristol, England, and another in Israel.

Colin Barker of ZDNet UK reported from London. CNET News.com's Alorie Gilbert contributed to this report.

3 comments

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HP-mart
Well done, HP! Go the Dell way, become a world-class grocery shop... and this is how US is going maintain its "lead" in the tech-world over China and India, heh?! Can't blame the CEO, he's just doing his job: so long the shareholders are rejoicing, everything must be fine!
Posted by Soliton (39 comments )
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Shareholders
Yes you are right, as long as the shareholders of HP or any Company remains happy then everthing must be OK!!! OK.
Posted by (32 comments )
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Easy Said
You can throw stones, but the reality is, you should direct them at the customers who have sold out to the dell way, not HP for having to react. Are you willing to pay HP more, in some case much more, so that they can keep the R and D effort up? Easy said...harder to actually do.
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