Hitachi Data Systems Lays Off Over 100 While Increasing Hiring For IoT, Cloud Initiatives

Hitachi Data Systems has laid off over 100 employees in California while hiring over 1,000 more as the company shifts from a focus on traditional enterprise data center infrastructure to one on new IT initiatives that include IoT and the cloud.

The layoffs of 118 people at Santa Clara, Calif.-based HDS was unveiled in the latest bi-monthly WARN, or Worker Adjustment and Retraining Notification, report as mandated by the California Employment Development Department. The California WARN act requires employers to provide 60 days advance notice of plant closings or mass layoffs.

The most recent California WARN did not provide additional information on the layoffs, other than to say they were permanent.

[Related: Hitachi Data Systems To Buy Big Data, IoT Developer Pentaho]

Greg Knieriemen, chief technology strategist at HDS, said his company has had some changes that were less a reflection of a move away from the company's storage business and more about the company looking at future opportunities.

The layoffs are not that unusual in the context of changes in the storage industry, Knieriemen told CRN.

"We're shifting aggressively to IoT, the cloud, and services," he said. "So there's a fair amount of right-sizing."

While Knieriemen declined to specify which parts of HDS received the brunt of the layoffs, he did say the company is actually expanding its headcount because of new initiatives.

"In the last year, we've hired over 1,200 people, and we currently have 300 openings," he said. "These openings are focused on IoT, the cloud, content management, services, and analytics."

This is a change that has been happening for several years. HDS, which is the global storage arm of parent company Hitachi, teamed with its parent company in 2013 to form the Global Office of Technology and Planning, or Global OTP. The Global OTP brought together a wide range of initiatives including storage and Hitachi's Smart City program to focus on such verticals as finance and oil and gas.

HDS expanded that initiative in 2015 with its acquisition of Pentaho, a developer of big data analytics and IoT technology.

In 2016, the company formed the Hitachi Insight Group, which leverages its big data and IoT technology to help public- and private-sector customers with what it calls Smart City, Smart Energy, Smart Healthcare, and Smart Industry initiatives.

While the layoffs have had little, if any, impact on channel partners, HDS's shift in business focus has, said Dave Cerniglia, president of Consiliant Technologies, an Irvine, Calif.-based solution provider and long-time HDS channel partner.

HDS has been clearly shifting people around to focus on its Insight Group with its Smart City and IoT initiatives, but the changes have been pretty seamless when it comes to storage, Cerniglia told CRN.

"We're seeing more territorial sales reps from HDS move to focus on a limited number of high-end accounts," he said. "We can go into HDS customers and sell not only storage, but also Pentaho, Smart City, and more. The channel is picking up business outside the largest enterprises. But support on the storage side hasn't changed much."

Hitachi's new initiatives are already available to the channel, and should be more easily accessible going forward, Cerniglia said.

"We're a tier-two partner that goes through distribution," he said. "The Insight Group is not really set up to work through the channel. So it's coming to us through HDS. We're getting our initial quotes via HDS."

Consiliant is already working with Hitachi's Insight Group on Smart City initiatives with state and local governments, as well as private entities like hospitals, Cerniglia said.

"We have proofs-of-concept on software to manage Smart City initiatives like surveillance with Hitachi and non-Hitachi cameras, as well as social media initiatives with Hitachi software," he said.