http://www.theinquirer.net/inquirer/news/084/1051084/hewlett-packard-cuts-salaries
"The math is pretty straight forward. From a productivity standpoint, you’re supposed to reduce headcount on par with declining revenue. If you believe the environment isn’t going to improve, you should take a bigger cut to get in front of the problems. You can do the calculation, as easy as I can. We have about 100,000 people in our product businesses, with revenue down roughly 20%, and an environment that may not get any better in 2009.I’ll be asked by investors, “Where’s the job action, where are you taking out this roughly, 20,000 positions?” Well, I don’t want to do that. When I look at HP, I don’t see a structural problem of that magnitude. There are pockets where restructuring needs to happen, and areas where actions will be taken as part of our ongoing workforce optimization process. But at a company-wide level, I don’t believe a major workforce reduction is the best thing for HP at this time."
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Mark Hurd
"The math is pretty straight forward. From a productivity standpoint, you’re supposed to reduce headcount on par with declining revenue. If you believe the environment isn’t going to improve, you should take a bigger cut to get in front of the problems. You can do the calculation, as easy as I can. We have about 100,000 people in our product businesses, with revenue down roughly 20%, and an environment that may not get any better in 2009.I’ll be asked by investors, “Where’s the job action, where are you taking out this roughly, 20,000 positions?” Well, I don’t want to do that. When I look at HP, I don’t see a structural problem of that magnitude. There are pockets where restructuring needs to happen, and areas where actions will be taken as part of our ongoing workforce optimization process. But at a company-wide level, I don’t believe a major workforce reduction is the best thing for HP at this time."
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Mark Hurd
11 comments:
I do think that buried in his verbiage was the key word "base" pay. Well, he can have his base pay cut, and more than make up for it with more promised bonuses, stock, etc. We've already witnessed previously that declarations of difficult wage freezes and bonus cancellations don't apply to top execs at HP. And his base pay is only a fraction of his total compensation. In earlier news releases, his base pay had ticked up slightly, whereas his overall compensation increased by up to 68%! Two-thirds increase! Whereas many of us have endured wage freezes (in economies where those in charge enforce continuous inflation, so we're continually paid less and less over time for the same work). And now a true pay cut. So some people will likely experience (or have experienced) the same 20% cut as Hurd due to freezes and inflation...and now the actual cut of 2.5-5%. But we don't get generous bonuses independent of corporate performance like the top execs to make up for our cuts. But he just stashed away $42 million more recently. A 20% cut from his base pay will only solicit a yawn. And he likely has a promised bonus (for "performance") to more than make up for that. But what really is "pay for performance"? I work for HP and my mgmt says NO compensation increases of any kind until further notice (2+ yrs out). But the recent missive tries to mollify the "best" and dangle the carrot of "pay for performance." Who is lying? Top mgmt or middle mgmt? How can Hurd say it's available and yet middle mgmt says it's not? And what's with the touchy-feely "To give you a little insight into my world..." I don't want to know the world of someone that lines his pockets at the expense of deserving underlings.
Union anger as Hewlett-Packard proposes 5% pay cut for employees
The Guardian (UK), 2/19, Richard Wray
Union leaders have reacted with anger to plans by Hewlett-Packard to slash employees' pay after the American computer manufacturer announced poor quarterly profits and warned about profit levels for the year ahead.
The company merged last year with IT contractor EDS, which has found itself at the centre of controversy in the UK over cost over-runs in large-scale government computer contracts. It employs about 300,000 worldwide including roughly 20,000 in the UK.
The company plans to reduce employees' wages by 5%, though for some it will come down by just 2.5%. The cut will be implemented straightaway in the US, but in Europe, where employment laws are rather tighter, HP will initially only force the wage cut on managers.
The company's chief executive, Mark Hurd, will see his base salary reduced by 20% while other executives will see their salaries drop by 10%-15%. The wage cuts are designed to reduce costs without the need for redundancies following a drop in third-quarter profits to $1.85bn, from $2.13bn. The company also reined in its forecast for annual profits and said it reckons annual sales will be $112.5bn-$116bn, down $14bn on its previous forecast.
"There are pockets where restructuring needs to happen, and areas where actions will be taken as part of our ongoing workforce optimisation process," Hurd explained in an email to staff sent on Thursday. "But at a company-wide level, I don't believe a major workforce reduction is the best thing for HP at this time."
HP was unavailable for comment on how the majority of UK workers will be affected by the move but Unite, the UK's largest union, said that any pay reduction in the UK would only be with employee agreement. Despite that, Unite national officer Peter Skyte expressed astonishment at the move.
"UK employees who have made a key contribution to the doubling of the HP services revenue and borne the brunt of redundancies in Europe will be astonished that a company that is increasing revenue and still making substantial profits is seeking a pay cut from its UK workforce," he said. "While the basic pay of senior executives is being cut, they will more than make up any reduction in basic pay by increases in their executive bonuses brought about by reductions in every one else's basic pay."
/EDS Australia meets with union
ZDNet Australia, 2/20, Suzanne Tindal
EDS union APESMA has met with representatives of HP and EDS today following the news that employees in Australia will be facing pay cuts.
EDS VP Australia New Zealand David Caspari had written to employees in Australia and New Zealand to say that the company would also look to put through cuts here, depending on legal issues and employee consent. A spokesperson from HP said that the cuts would be across both HP and EDS.
Michael Butler, industrial relations director at the union (the Association of Professional Engineers, Scientists and Managers, Australia) said that he met with representatives of both HP and EDS today. "They've indicated to us that they see this as an alternative to mass redundancies," he said, although he added that they also wouldn't give any commitments that there wouldn't be job losses in the future.
The union will be meeting with HP/EDS again next Wednesday, where it will put forward what it believes needs to happen for pay cuts to go ahead legally and without discrimination.
In order for the cuts to go ahead, there needed to be employee consent, which the company has acknowledged. Butler believed HP/EDS required a process to make sure that all employees understood the choice and that the message didn't get garbled as it travelled down the levels of the company.
"We will do all we can to make sure the process is fair and make sure that there's genuine consent," Butler said.
Butler also intended to speak about other general issues such as what it will mean about jobs in the long term if employees do agree to the pay cuts.
HP faces more unrest over staff pay cut plan
Computing, 2/19, Bryan Glick
HP faces the threat of further employee unrest after announcing a plan to cut the wages of its global workforce by five per cent.
The move came after the technology giant announced a 13.5 per cent fall in its first-quarter profit.
The pay decrease could affect up to 300,000 staff, with higher cuts possible for senior management.
Last month, employees of HP and EDS demonstrated outside company offices across Europe in protest at plans to cut 3,400 staff following the merger of the two suppliers. Members of the Unite trade union took part in protests in London and Bristol as part of a European day of action also targeting sites in Austria, Belgium, Italy, Spain, France and Germany.
Unite national officer Peter Skyte said HP UK staff will feel particularly hard done by if they are affected by the proposed pay cut.
"UK employees who have made a key contribution to the doubling of the HP services revenue and borne the brunt of redundancies in Europe will be astonished that a company that is increasing revenue and still making substantial profits is seeking a pay cut from its UK workforce," he said.
"The company has today told us that in the UK any pay reduction will only be with employee agreement and that no coercion will be applied, and we will be seeking written assurances about this when we meet the company next week."
"The company has today told us that in the UK any pay reduction will only be with employee agreement and that no coercion will be applied..."
Congratulations to you fellow employees in non-U.S. countries! In the U.S. "coercion" is the standard operating procedure (SOP)...modus operandi..."just the way things are done around here." Oh, but it's actually even better at my site. At my site, mgmt doesn't even announce anything to us...or meet with us (except every 4 months or so) [and I mean my direct mgr does not discuss the merger, wage freezes, etc. with us]. Rather, if we are foolish enough to inquire, we are told in curt tones to "read the web site". That "mgmt 5 layers up doesn't know any more about the situation than you do...than what is on the web site." And, of course, there is no provision for us to view the all-hands corporate or services division broadcasts. We can't call in. We are not allowed to stream the broadcasts. We have no VPN access to the broadcasts from home. Requests for the media to be ordered and provided on site are met with disdainful laughs. Yep, that is the level of "discussion" that ensues for the various wage freezes, bonus cancellations, wage cuts, etc. We are on our own. I derive absolutely no HP support for any work I do. I accomplish everything on my own merits based upon extensive experience gained at numerous companies prior to HP. I have no mgmt support from any (and every) layer above me that I could conceivably directly contact (and I've tried to get something, anything resolved by at least 3 of the 5 layers above me that I can contact) [layer 4 verbally beats me up if I even step into his office after he posted an "open door" policy; layer 5 just ignores me].
So, in summary, if I happen to receive an email from Hurd or read in the daily news I might become aware of the fact that my wages will be cut. I'd also notice my next reduced paycheck. But no mgmt discussion. Do I have a choice? No. Is it coercion? I guess in the sense that I have absolutely no say in the matter except to leave. Is the change discussed with me? No. I'm supposed to read the web site and see what's in store for me. Ah, the wondrous advantages of the Web and automation. What are my multiple layers of highly paid managers doing again? Obviously, not managing me.
Pissed HP employee comments :
http://www.siliconbeat.com/2009/01/20/2522/
question for employee broadcast:
why not a VoW survey, NOW, with relevant questions to get employee feedback on recent annoucement. you would definitively blow up participation rate to survey.
feel free to relay or duplicate
HP staff voice their discontent over pay cut plan
Computing, 2/27, Bryan Glick
HP staff around the world are protesting against chief executive Mark Hurd's plan to cut their pay following a decline in the firm's profit.
Computing reported last week that the pay decrease could affect up to 300,000 staff, with higher cuts for senior management.
But many HP employees have since contacted Computing through our web site to complain about their treatment.
"Some people within HP UK have had no pay rises for nine or 10 years. I know because I am one of them," said one HP worker.
"Everybody has to say 'no' to taking this cut. It will not save your job and you will have cost yourself some redundancy money when they get around to redundancies which is a certainty."
One Belgian employee of recently-acquired subsidiary EDS said Hurd should admit he has made a mistake in the face of such a backlash.
"Don't forget we, the working force, are the motor of your HP vehicle. Do you really think it's a good idea to decrease the salaries for already underpaid and overworked employees?" he said.
Several HP workers pointed out that senior executives' claims to be taking a higher pay cut are disingenuous when they are paid such large bonuses.
"Mark Hurd made $42.5m in fiscal 2008. HP gave him $25.4m in cash last year, including a $1.45m salary and $23.9m bonus money, according to compensation figures contained in the company's proxy," said one employee.
"He gets $42,514,524 of which 'only' $1,450,000 is his base salary. He offers to cut 20 per cent of his base pay. Well, that still leaves him with $41,354,524 plus his stock options. In fact, his pay-cut of 20 per cent is really only one per cent."
A worker signing himself as "Mr T" added: "This is the most shameful decision the high management of HP has taken."
And another warned of the potential effect on HP's business in the UK.
"What on earth are they thinking? This will bring the firm to its knees. You now have the entire UK staff reduced to only doing the minimum effort, leaving early and generally not giving a damn what happens," he said.
"This will soon be reflected in customer satisfaction and contracts will vanish. Someone else has to take on the contracts so people will still have jobs."
The pay cuts were also announced after employees of HP and EDS demonstrated outside company offices across Europe last month in protest at plans to cut 3,400 staff following the merger of the two suppliers. Members of the Unite trade union took part in protests in London and Bristol as part of a European day of action also targeting sites in Austria, Belgium, Italy, Spain, France and Germany.
Latest news on activities in the UK in response to the announcement of a proposed cuts to base pay at EDS/HP:
PCS is organising members meetings at all major sites. The following have so far been organised:
- Lythym St Annes (North West England) - 3rd march
- Cobalt House, Newcastle - 4th March
- Durham House - 5th of March
- Hallamshire Business Park, Sheffield - 6th March
- Matrix House, Swansea - 9th March
The plan is to galvanise members over the proposal at these meetings and increase further our network of volunteer activists.
http://www.damiansaunders.net/2009/02/26/commentary/hp-pay-cuts-an-unfair-act-of-economic-oportunism-and-greed/
50 HP and EDS EWC representatives from 25 countries met management on March, 26th and 27th in London for an extraordinary European Work Councils session about the special savings measures announced by Mark Hurd.
EWC recommandation to EMEA employees HP and EDS EWCs members consider that management proposition is not acceptable :
· The current business situation does not justify the measures that management is taking and which impact mainly the mainstream employees. Should the crisis have more impact on HP, the EWC would like to discuss more balanced and fair measures (salary cut of top executives for example represent less than 1% of their total earnings). In particular EWC cannot accept that management asks employees for a definitive measures and do not make these measures temporary until the economy recovers and HP’s situation gets better.
· HP is misusing the crisis to justify the salary reduction which is actually aim at increasing the variable part of employee salary. The EWC has no guarantee that the savings will allow the company to grow and protect jobs. On the contrary, the EWC fears that the savings will be distributed to shareholders or to a few employees in a discretionary way (as shown by the distribution of an average PFR of more than 50.000 euros to managers in January 2009).
· Employees should be aware that accepting such a salary reduction will mean lowering their pension plan, vacation pay, severance packages and other salary related benefits.
· Management should resist the pressure that Senior managers may place upon them to accept the pay reduction. Managers who do not believe the salary reduction is the correct measure should be free to say “NO”.
· Just because employees or managers refuse to give their consent does not mean they do not support the company and contribute to its future.
For all these reasons, HP EWC and EDS EWC members clearly recommend that EMEA employees including managers to NOT accept the salary reduction
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