VNUNet, 5/28,
HP has confirmed rumours that it plans to axe thousands of jobs, after protests by UK trade union Unite. The company has submitted a proposal to its European Works Council to cut over 5,700 staff in EMEA. HP has around 80,000 employees in the region.
HP is also set to offshore its enterprise, storage and server production plants in Scotland and Germany to a partner in the Czech Republic by 2010. Although HP will not comment on exactly how many UK workers will be affected, Unite puts the figure at around 850. Staff were informed of the news today, and a report from Unite was released shortly afterwards informing the public of the cuts. Unite has condemned HP's decision to move manufacturing jobs offshore, pointing to HP's profit of £1.1bn in the most recent quarter. Unite has also called on the UK government and Scottish Parliament to increase investment in the UK's manufacturing sector. "Westminster offers no meaningful investment, and Holyrood does not even recognise manufacturing as a key plank of its economic plan," said Unite Scottish regional secretary John Quigley. "When over £900bn of public funds can be poured into bailing out the banks, it is utterly unacceptable that help cannot be directed into a sector that is fundamental to nurturing our economic revival."
Downing Street responded by listing ways in which it is helping manufacturers through the global downturn, such as the Enterprise Finance Guarantee that supports £1.3bn of lending to small businesses, the HMRC Business Payment Support Service that allows companies to defer paying tax, and the Manufacturing Advisory Service that offers advice on cost savings. "We know how tough it is for manufacturers. Our manufacturing is bearing the brunt of the global downturn because it is deeply integrated into global supply chains, and supplies global markets," said a spokesman for the Department for Business Enterprise and Regulatory Reform.
Meanwhile, HP's offshore move was questioned today by the Scottish Parliament. The plant, based in Erkskine, employs 1,300 people, more than half of whom are likely to lose their jobs."This is a company which has made a profit of some £5.2bn in 2008 due in part to the hard work of the men and women in my constituency in Erskine," said Labour MSP Trish Godman, according to an Associated Press report.HP recently announced plans to cut its global workforce of over 320,000 by two per cent, in addition to previously imposing a five per cent pay cut across all operations.
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HP plans 5,700 job cuts in EMEA
ZDNet, 5/28, Tom Espiner
Hardware giant HP plans to axe up to 5,700 employees, in addition to previously announced losses, the company said on Thursday.
Thousands of employee positions will be terminated in Europe, Middle East and Africa over the next two years, HP said. The company has approximately 80,000 employees in the region. The countries especially affected will be Scotland and Germany, where HP has its EMEA Enterprise, Storage and Servers (ESS) production facilities. These factories are slated to be closed in 2010 and production moved to the Czech Republic.
The factory closure in Scotland will affect 710 workers at the enterprise, storage and server plant in Erskine, an HP spokesperson told ZDNet UK on Thursday. Earlier reports had suggested that the number of HP workers affected by the cuts in Scotland would be 840.
"We can confirm that the number of jobs affected will be 710," said the spokesperson. "Out of that number, 80 are permanent HP employees and the remaining are temporary workers and contractors." The spokesperson declined to say how many jobs would be affected by the factory closure in Germany.
The company did not give details of how it would proceed with the layoffs. "In keeping with governing local law and established practice, HP will consult with employee representatives in the countries affected by the proposal on the conditions for the implementation of the restructuring measures," the company said in a statement.
HP employees have been hard hit by layoffs over the past year. The company announced 6,400 job cuts earlier this month, following a fall in PC revenue of 19 percent in its last financial year. In the same period, its imaging and printing revenue dropped 23 percent and its storage and server sales declined 28 percent. These layoffs came on top of previous job cuts, which followed the integration of IT services company EDS.
Scotland loses 800 jobs as HP cuts hit Europe
Financial Times, 5/29, Maija Palmer
Scotland was in the firing line on Thursday as Hewlett-Packard announced its intention to cut 5,700 jobs across Europe over the next two years in response to worsening market conditions.
The largest technology company in the world said last week that it was planning to reduce group headcount by a further 2 per cent, or about 6,400 jobs, on top of a 26,000 company-wide redundancy programme announced last year.
However, it became apparent on Thursday that, in this new round, the axe would fall heaviest in Europe, where HP has about 80,000 staff.
News of the headcount cut caused consternation in Scotland, where the factory has operated since 1987, and now close to 800 jobs are to go.
The company is planning to relocate production of its enterprise, storage and equipment from two factories in Scotland and Germany to a partner company in the Czech Republic in 2010.
Jim Sheridan, MP for Paisley and Renfrewshire North, said: "I am deeply worried that management at Hewlett-Packard are using the global downturn to their own advantage, exporting jobs from Scotland to exploit cheap labour in eastern Europe." The cuts are to come across all divisions, which include sales of computer hardware and printers, as well as IT consulting services.
They are the latest indication that the European technology market is still far from making a recovery.
A number of other European technology companies have recently also cut headcount, including Logica, Sage and Aveva.
Sales of software at the region's bellwether companies, SAP and Dassault Systèmes, were down about 30 per cent in the recent quarter.
"The fundamentals are still getting worse and our concern is that there is more bloodletting to come, especially in IT services," said Rajeev Bahl, an analyst at Piper Jaffray.
"The Americans saw it first, last autumn, and Europe is around four to six months behind."
"These kinds of cuts are not happening in other regions," HP said.
"The economic situation in Europe is a bit delayed."
Last week, Mark Hurd, chief executive, said the company had seen improvements in the US and Chinese consumer markets, while sales in the EMEA region fell by 11 per cent.
HP's sales of servers and storage equipment declined by 28 per cent in the second quarter, making it the company's worst-performing division.
Overall sales at HP fell 3 per cent in the second quarter and the company forecast that sales would slide about 4 to 5 per cent for the full year.
Plans of the job cuts were submitted to the European Works Council and consultation over the cuts will begin in the second half of June.
Hewlett-Packard to cut 700 jobs
The BBC's Hayley Millar reports on the job losses at Hewlett-Packard
A total of 700 manufacturing jobs are to be cut at the Hewlett-Packard plant in Erskine near Glasgow.
The company is to close its manufacturing operations in Scotland and Germany and transfer the work to the Czech Republic.
About 1,300 people are employed by the electronics firm in Erskine and it is understood 600 will remain at the site.
Speaking at First Minister's Questions, Alex Salmond said everything would be done to assist those made redundant.
Mr Salmond was speaking in response to a question from the local MSP, Trish Godman, who said she had been informed of the job cuts.
Ms Godman told MSPs that Hewlett-Packard had made significant profits last year.
She said this was due in part to the "hard work of the men and women in my constituency".
A statement from the company said: "HP regularly reviews its businesses and markets to ensure they continue to offer the best possible value to our customers."
Local MP Jim Sheridan reacted angrily to the news and accused the firm of abandoning the workforce.
He said: "It is disgusting. These workers are being tossed aside after helping to make vast profits for Hewlett."
Hugh Henry, MSP for Paisley South, said: "This is a disgraceful move by a profitable company.
"All sorts of promises were made to the local community to try to justify the destruction of the green belt when the factory was built.
"Huge amounts of public funds have been used to assist these companies."
Agency staff
He called on First Minister Alex Salmond to force the company to face up to its responsibilities.
He added: "I want him to examine whether any grants can be reclaimed.
"I also want him to promise that an emergency task force will be sent in to help workers find alternative employment."
The Erskine plant was opened in 1987 by Compaq and was taken over by Hewlett-Packard in 2002. At one stage 2,500 people were employed on the site.
Most of the workers still at the Erskine plant are agency staff, employed by outside organisations such as Manpower.
In January, the company said it was cutting its night shift with the loss of 153 jobs.
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