HP's job cuts have affected its world class research teams, with the company electing to close four "more speculative" research projects.

One of the HP Labs projects has been led by legendary former Xerox Parc technologist Alan Kay, 65, who will leave the company along with four HP Labs executives, according to the Mercury News.

Terminated projects include: the Cambridge Research Laboratory, which worked on health and wellness technology; the Consumer Applications and Systems Laboratory; the Emerging Technologies Laboratory and Kay's Advanced Software Research team.

End of an era as Kay departs

Kay led the 1970's Xerox Parc team that developed windows and a graphical interface for the Alto, an early PC which influenced Apple's original Mac.

In depth, the projects include an effort to develop a next-generation operating system for the Internet, work on high-density portable storage devices and research on technologies for health and wellness, said Dave Berman, an HP spokesman.

The company has decided to focus on research projects that have the best chances of paying off for HP in both the short and long term, Berman said. For example, HP Labs' work on developing a new "crossbar latch" transistor design using carbon nanowires will continue, as will other projects focused on quantum computing, he said.

HP is also changing the way its research efforts are organized. All research groups will now report to the head of HP Labs, Dick Lampman, Berman said. Previously, some of the work at HP Labs reported directly to individual research centres.

Some of the projects within those laboratories will transfer to other departments within HP Labs, along with some of the researchers working on those projects, Berman said. But the heads of individual research centers, such as the Cambridge Research Laboratory, are leaving HP, he said.

HP's r&d focus remains

HP spent about $3.5 billion on research and development in its 2004 fiscal year, according to the company's annual report. Advanced research projects have traditionally been very important to the company, following in the footsteps of founders William Hewlett and Dave Packard. But 2004 research spending was down from the prior year, as HP struggled to generate profits across its businesses.

HP CEO Mark Hurd promised to keep spending money on research projects when he outlined his restructuring plan for the company on Tuesday, saying that HP's work on advanced research sets its apart from its rivals in the industry.