back to article HP imposes staff wage cuts

Hewlett-Packard workers fired up their PCs this morning to find a long memo from Mark Hurd explaining why he was imposing wide-ranging pay cuts in an effort to prevent further job losses at the computer vendor. The move followed HP’s first quarter earnings report yesterday in which it posted a double digit dip in printer, server …

COMMENTS

This topic is closed for new posts.

Page:

Exempt vs non-exempt

Definition is here: http://www.hrhero.com/topics/exempt.html

0
0
Flame

A Good Deal?

So despite being profitable EDS staff get to take a paycut to keep HP product workers in jobs so that HP can get its share of Obama's 'stimulus' so the share price goes up and Hurd still makes a packet. Nice!

0
0
Thumb Down

Exempt / Non-Exempt

I've just found out the difference between exempt and non-exempt.

Exempt means salaried employees,

non exempt means employees paid by the hour.

Looks like I'm on for a 5% cut then. Great.

0
0
Anonymous Coward

But we do get a shiny medallion

So, today we wake up to find news of pay cuts buried in Mark Hurd's quarterly results email. He didn't even have the guts to send us a formal, distinct email on the subject of pay cuts. Yesterday, the IT folk attended Randy Mott's coffee talk where we were all given a pat on the back for a job well done and given cake and a shiny commemorative medallion to make us feel good about ourselves. How old do they think we are, 6?

I wonder, is Mark Hurd going to give back some of this 30 million plus bonus? We all know his base pay is nothing compared to his bonuses. The rest of us are not so fortunate. When times were good, we were told that the company was moving away from pay rises to bonus schemes although there is never any guarantee of getting one. Effectively, they have just given me a bonus this year and with this pay cut, they will take is straight back! I am hoping that UK legislation will not make this so easy.

HP loves to make out we are all one big happy family, but I would not treat a mangy, stray dog the way they treat us.

Disgruntled, demotivated HP IT employee

0
0
g e
Silver badge

Prevent job losses

... but not staff losses, presumably ;o)

0
1
GT
Flame

Aren't they contractually protected?

Certainly if they were bankers, there would be an iron clad guarantee of their salary, not to mention bonus.

0
0
Gates Horns

Quid pro gone

So HP will be happy with 15% less work? Friday afternoon's off?

Sorry, they want the same amount of work for less money?

Who taught them business?

0
0
Unhappy

Similar bollocks at my company

Execs are to get a pay freeze this year while the grunts will suffer reduced pay rises. Howver nary a mention of what will happen to the execs bonuses which will no doubt be exorbitant to the extreme to compensate for their 'loss'. The grunts do not get any bonuses so will be the only ones to lose out. Guess what I am. Fuckers.

0
0
Thumb Down

HP EDS Pay cuts

There are many EDS employees who haven't even had a cost of living pay rise for years - many haven't had any rise at all for 2 or 3 years. Many staff already get paid well below market value for their roles and now they are being told they have to accept a pay cut of up to 15% as well as pension benefits and other benefits being reduced. In addition there hasn't been any bonuses for years even for those staff who exceed all their targets. The morale in the company is already lower than anyone not working there could imagine so how do the managemnt think this will help? As staff morale continues to fall more and more people will be off work with stress and those at work will feel less and less inclined to go that extra mile.

0
0
Anonymous Coward

Pay Reductions

This will only cause the elite employees that EDS and HP still have to take other jobs. We all know that the current job market is tough, but the elite employees will find better opportunities. Hp's employee pool will be significantly weakened and morale for those remaining will be at an all time low.

Mark Hurd actually got a 17 million dollar raise last year. a 40%+ pay raise. His base salary that he took a 20% reduction in to "set an example" means nothing. With his incentives I am sure he will get another gig raise this year. A salary freeze is bad enough, but how many people could have avoided a salary reduction with the extra 17 Million he received last year?

This is the beginning of the end for HP as all the good employees will be headed elsewhere........worst move they could have made!

0
0
Thumb Down

Wonder If They'll Get It Back When Prospects Improve?

This is fairly common for Japan, where the pay structure is about 50% "bonus" for all workers. However, when the hard times are over, their salary returns to what it was, and becomes the baseline for raises. They don't get any "make-up" for the lost wages, but no one pretends that their reduced wage was the baseline.

How much you wanna bet that getting your 5% back (if you even get it back) will be trumpeted as you getting a 5% "raise," and that you should be happy with that?

Also, anyone who knows anything, knows that Executive salary is only a tiny portion of the money they make. Most of their "salary" is actually things like bonuses, company perquisites, stocks, stock options (which, I will lay odds, will be revalued down, then never increased after the dust settles), etc.

0
0
IT Angle

Capitalism who needs it?

Moan moan moan...

In the good times we all smile... in the bad times only the top brass smile.... get over it...

They get to the top because a) the old boys club, b) they are as ruthless as hell and can lie through their teeth.

When you look up the company tree... what do you see... you got it... a load of arseholes... They see monkeys...

The world goes round.... Such is life...

0
0
Joke

Sorry HP Workers

but if they spent a little less on packaging maybe there wouldnt be all this trouble.........

0
0
Anonymous Coward

Just another way......

.....of forcing people to either take VR or better still, quit! Shit heads!

0
0
Unhappy

Joy

*sigh*,

I personally would rather see job cuts in those areas of HP that have seen the massive losses. Leave EDS and TSG alone and get rid of the obvious deadwood in hardware production and sales. As if not we're not pissed off enough with all the job cuts last year.

In better time's I'd jump ship

0
0
Anonymous Coward

Another one who hasn't done basic economics..

Perhaps it's because there's a P in the name.

Prices may go down, but Debt does not, that includes HP's. Deflation is worse than inflation.

0
0
Pirate

Pay

isnt it always the way.

at my place, the md takes home a 99K bonus, as well as regular bonuses through the year.

last year, the directors got a 4.5% "Cost of Living" increase, while the grunts got 2.5%

what makes their lives a whole 2% more expensive?

surely, there can only be one cost of living increase!

0
0
Dan
Thumb Down

Non HP man in an HP world

Watching the news of this spread round the office as people opened their Outlook was like watching a crippling plague slowly creep round the desks.

Good job Mr Hurd, instead of making a few people redundant, you have demotivated the ENTIRE GLOBAL workforce.

10 out of 10 for trying, minus several million for good thinking.

0
0
Boffin

EDS or HP going to cut your pay?

If you are in the UK read this http://www.guardian.co.uk/money/2009/jan/11/pay-cut-employees

0
0
Unhappy

20% Base pay cut...

According to http://www.reuters.com/finance/stocks/officerProfile?symbol=HPQ.W&officerId=601039

Hurd earned a mere $2,823,500 of his total yearly earnings of $25,254,500 as base pay. I would guess this will hurt him a lot less than a 15% cut to most other workers in the company. I work out that this is diluted to an enormous 2.3% pay cut in his case.

0
0
Unhappy

Yes, it does affect "pre-aquisition EDS employees" too

We had the mail too, promising "Total Rewards Changes".

The really upsetting aspect is that EDS, despite my having had exemplary reviews each year, have never seen fit to award a salary increase or bonus - i.e. an effective pay cut each year. Hurd's base pay reduced by 20%? My hero! Big flipping deal! - the remaining 80% is probably 10 times my salary (sorry - 10.5 times - if my maths is correct, after the 5% has been removed).

Hurd promises us that if we do well, we may be able to make up the difference in bonuses - well, having never had one at EDS, I'm holding out no hope. And, I'm sure the "pre-aquisition HP employees" are aware of the "alignment" of EDS and HP's policies - guess which bonus scheme they will plump for?

If we hadn't suffered the massive job-cuts over the past year, this may have been an easier bit of bad news to swallow...

Grrrrrr....

0
0
Anonymous Coward

The real skinny...

Here is a true understanding of HP’s CEO compensation for 2008. So according to his actual % decrease in total compensation we are talking not 20% for Mr. Hurd, but .71% of this TOTAL 2008 Compensation. Of course I do appreciate him taking the highest %.

Hey, but I am very happy to take 5% cut if it keeps my job .

Information was gathered from: http://www.domain-b.com/companies/companies_h/hewlett_packard/20090121_mark_hurd.html

Salary 1,500,000.00

Bonus 5,300,000.00

non-Stock 18,600,000.00

Stock 12,900,000.00

Options 4,200,000.00

TOTAL COMPENSATION 42,500,000.00

20% pay cut of base 300,000.00

% decrease of TOTAL Compensation -0.71%

0
0
Anonymous Coward

Another *crewing

I joined HP as a grad a number of years ago, the downward pressure on salaries has been huge however there are still those people who get paid well as they were at the right point in their career at the point that they joined the company. For me this takes me back to where my salary was about 5 years ago. I may as well leave and go join another graduate scheme if i can find one as id be better off with less expectations on me.

0
0
Anonymous Coward

Thanks again EDS/HP making my day even more rewarding!!!

My god, 3 years of service to EDS, no pay rise (not even cost of living pay-rise) and now i get this wonderful email saying im going to be getting a paycut for all my hard work.

It makes me physically sick that I come into work every day and work my arse off and there is no gratitude, instead just a slap in the face and kick in the balls!

Good news is that from what i can see they cant force you to take a paycut but would like me to accept one, well im sorry to all those incompetent fools in HP (namely the chaps who havent done their job properly in the hardware sector) but i shall be declining given the oppurtunity!!! tossers

0
0
Flame

In other news..

you do know the titanic sunk?

If you don't like the pay cut, you can always get another job, there's loads out there.

I'm sure your l33t skills will easily command what you currently get paid.

0
0
Unhappy

UK Employees, let's make a stand - reject the pay cut!

I too got in this morning at 8.15am to be greeted by the lovely email. I then googled Contract law and found that in the UK, if a contract between an employer and an employee is to be changed, then both parties must agree. If the employee doesn't agree to it then it cannot be changed! This is why in EMEA they are looking for "consent".

Interestingly, they do not specify what will happen to those who reject the reduction. My guess is it will be a factor in the "restructuring" which will no doubt occur following this pay cut.

I would much rather see people made redundant than everyone take a pay cut, there is a lot of deadwood in the company so get rid of them! Those that are confident of getting jobs elsewhere will be more likely to reject the pay cut and more likely to be made redundant in the future...it makes no business sense. Surely you want to keep the best?

Oh and as for the CEO, does he think all employees are so malicious that we want to see everyone else struggle while we do? I don't care that you took a 20% pay cut, I only care that I will be losing out on my 5% which I seriously need.

0
0
Anonymous Coward

Whoosh

There goes the remaining EDS morale then, straight out of the f***ing window. I've been schlepping my arse around a production plant all week, in the freezing, f***ing cold; updating some of the crappiest documentation I've seen in a long time (a thankless task, at the best of times). Finally got my backside on a chair this afternoon, only to be greeted by three delightful emails, first from the hatchet and then from the regional and local mafia (once the whip had been passed down). What can I say? More bad news on top of bad news. EDS folks have been shafted in a big way over the last year. Those of us who survived the integration job cuts (most of the 24,600 job losses came from EDS, by the way; HP staff got off very lightly) now face a salary cut, despite the fact that the EDS-fuelled services unit was profitable in Q1. Without the EDS, HP numbers were down 18-19%. EDS included, HP is in the black. So, as soon the legel merger kicks in I have to subsidise my new 'family' members, even the contractors! Mark Hurd, is, IMHO, a complete and utter f***ing c*nt. And to top it off, he proudly announces that he'll be taking a 20% cut in BASE salary (lead the way, Mark) but the bonus scheme will be unaffected. Does he really think the grunts are that stupid? If I didn't have a family to support, I'd be off.

0
0
Pirate

Similar to IBM

....similar to the measure they took a year or two ago where we have to work 40 hours a week to make the utilisation target necessary for a half-decent PBC rating.

Even though we are contracted and paid for 37.

But its all voluntary, honest.

0
0
Pirate

Having a job or cut off

If I had a choice between having a job [paid less] in these difficult times or getting laid off with chances of not getting my job back - I'd take the pay cut.

Taking a 5% pay cut is better than getting whatever the government forks out - and that won't last forever.

0
0
Dead Vulture

EDS man with another job offer...

do you think I'll be able to get a VR pay off as well :-)

Well blow me, this wasn't what I signed up for. So it's time to sign off...

Ta Ta

0
0
Paris Hilton

Layorfs - HP lost it when Bill n Dave retired

Ladies (and gentlemen)

For those HP employees who remember the Carly mgnificenc of 6+ years ago (and boy she made Paris look bright), we (I am an ex HP employee) were all asked to take a voluntary paycut of 10% to 'protect jobs'. I think most of us did in my team. 1 month afterwards there were substantial layoffs.

This was the point at which many HP folks realised that we were no longer in Kansas, and despite extremely good results, the ritting (sp) was on the wall.

I left later. The social contract had gone.

Amusingly I now find that the company I started up has HP as a major customer. It has lost the capabilities we supply, which might be good for HP, but I suspect was never really thought through given our margins from HP are now far higher than any other customer...

0
0
Thumb Up

This is similar to what HP did in the 70s

except they asked people to work 4days a week for a 20% paycut. Here it seems that the paycut is not resulting in a reduction in work hours, which is odd. Oh well, I agree with this action - better than a job cut in this environment and in my experience, most cuts often don't get the real deadwood.

0
0
Black Helicopters

Corporations are personal fiefdom of executive class

Don't you guys realize that corporations and everything they do have one main function: to support the lifestyle of our heroes in the Elite caste, we are all mere functionaries. Everything they do is just a smokescreen to disguise their urge to (monetize, incentivize, synergize) PILLAGE and PLUNDER the last vestiges of wealth from the peasantry.

0
0
Flame

Tough

I know a guy who works for HP as a high level hardware maintenance engineer and he openly admits that he has between £2000 and £2500 disposable income a month. It's not just a boast, his lifestyle totally indicates that he's speaking the truth, expensive watches, cars etc.

This is someone who basically swaps out hardware when it breaks. I'm not even slightly sad that he's getting a pay cut because he's earning some obscene amount already.

Needless to say he's not happy about it. Personally, I'm laughing at him!

0
0
Flame

@Anon

That is ONE exception, Anon. The more usual HP experience is described (anonymously) at sites like these:

http://www.proletar.com/By-Employees/HP.html

http://hpwfr.blogspot.com/

The common refrain is that HP staff are ROUTINELY paid below market rates. Also for many workers there has been NO salary increase for 5 years. There has been a continuous effort from upper management to demoralize the workforce by eroding pay and conditions ~ how would you like to have a pay freeze for 5 years while the cost of living rockets up? The only way to further ones career is to LEAVE a parasitic corporation like this. "Slasher" Mark Hurd sucked away the last remnants of good will years ago. There's no longer a company culture when every message from the corporate lords and masters is designed to suffocate talented people and treat them like drones.

0
0

Attrition accelerator

Jeez they will do anything to avoid making redundancy payouts. Hurdo, you can have these ideas for free:

It's healthier to stand while working, so remove all chairs

Truth and reconciliation commission where unhappy customers can vent at randomly selected workers

We can't afford cleaners any more, you're rostered on fortnightly Thursday evenings. I want to be able to eat off that urinal

0
0
Go

There is a better life...

I left HP last year and it is the best thing I ever did. I now work for a company that values my existence, acknowledges that I have a right to a life outside of work (I've not worked in the evenings or at the weekend since I joined i.e on MY time), oh and they gave me a better package into the bargain.

HPers - there is a better life out there, even in the current job market!

0
0
Pirate

How very noble

I was a dismayed as probably all of the employees who opened this mail yesterday. As has already been mentioned certain areas of the business are those that have delivered all of the gains that have kept the company in the black. These same areas are the ones where the staff have been starved of reward year after year and still we get treated like cattle.

It is not us that have failed Mr Hurd but you and your ilk, you sit their in your Ivory towers like some demonic monster from a fantasy novel, draining the riches and all lifeforce from the land around you.You have no Morals , You have No Ethics, it concerns you not at all that some of your employees will have to sacrifice much of their already meagre lifestyle so that you and your cronies can bathe in the glory of your ill gotten gains. You are no more than parasites.

I ran some very quick numbers and was not in the least bit surprised to see that the contribution from the work force from this saving is roughly equivalent to the bonus received by Mr Hurd. So not that I wish to cast any futher suspicion on the real motives behind this but consider the following.

£20m is fairly small potatoes to an organisation of this size, after all we pay our CEO that in bonuses, however it makes nice wondow dressing to the Market and Shareholders. These same people will decide our fate by giving Mr Hurd a vote of confidence and none will think to challenge his Annual Bonus as he has made all the right noises in such difficult times.

DIFFICULT for WHO not you Mr Hurd you parasitic TURD,

My answer to 5% - GO TO HELL , I need every damned penny I get to keep my head above water.

0
0

Apoplectic!

HP has an outdated hardware build/supply model that helped Dell to pi55 all over them in recent years, but in order to sustain it, EDS in Europe, which remains profitable, has not only been asked to swallow 000's of redundancies (impacting resourcing seriously in some areas) but is now being asked to take a pay cut that we can ill-afford, just to keep US employees in a job that results say shouldn't exist any more......

How stupid can HP management be? When times are hard, people don't buy PCs, so you scale back your manufacturing operation or get a better one....in the IT service industry nothing changes; you still have long-term contracts that have to be serviced and the revenues from those areas remain, so why does it make any sense to cut staff and pi55 the client off? Do these morons really think there won't be any payback at renewal time?

HP should have stuck to what it knows; selling tin (and apparently it isn't much good at that!) and kept its hands off a viable services company that it clearly doesn't understand...god forbid, we would have been better off being bought by IBM, at least they would understand what we do for a living and we probably wouldn't be having these discussions!!! Hurd is a complete moron!!!!!

0
0
Anonymous Coward

Setup for Future Cuts?

just think entering Q2 job cuts could be 5% cheaper across the globe - that's gotta be a massive saving if this was all just a setup for that action

0
0
Coat

It's not just HP...

Mr PonyTail@Sun.com took out some $11m in pay/compensation (http://ceoworld.biz/ceo/2008/09/25/why-jonathan-schwartz-sun-microsystems-ceo-gets-11m-2008-pay-package/)

and then delivered the news that we would not be getting a pay rise (again) this year. It doesn't matter how 'ethical' the company likes to portray itself, it ignores at its own peril the salient fact that it's the workers in the field that generate the sales.

Why am I still here? 'cos of the impending RiF payment of course!

0
0
Stop

Rejecting pay cuts

Me and a large proportion of my colleagues in the UK will be rejecting the pay cut. I would urge others to do the same.

0
0
Anonymous Coward

Not Just HP!

Think this is just HP? This will spread like wildfire if HP gets away with it.

0
0
Alert

Too bad HP did not read IBM's CEO's email

"I am pleased to announce that we will not only be paying bonuses to IBMers worldwide, based on individual performance, but that they’ll be funded from a pool of money nearly the same size as last year’s. That’s significant in this economy -- and especially so, given the size of the 2007 pool. Further, our salary increase plan will continue, covering about 60 percent of our workforce. As always, increases will go to our highest performers and contributors. We should all feel good about the company’s ability to invest in people in these very concrete ways."

Big difference in CEO quarterly letters to their company

0
0
Alert

Say goodbye to all bar the dross staff...

How to destroy a service organisation.

Stage 1: Paycut announced. Best staff have the impetus to look elsewhere for jobs on their current salary/improved salary.

Stage 2: Restructuring removes employees who refuse to agree to a paycut. If one manager has been daft enough to state in a mail that this will happen to people who don't consent to the paycut, HP is hit for compensation from those who have been forced out.

Stage 3: Hire replacements for the talented staff who have left at the new payrates, ensuring a drop in quality.

Stage 4: Previous middle tier staff are now the top tier, and having to carry the new staff for training or lower workrate.

Stage 5: Middle tier staff look elsewhere for roles on the new salary with less stress/less work.

Stage 6: Company is left with none of the original top tier, a minority of the middle tier, and the majority of those who were not good enough to get work elsewhere and did not want to rock the boat.

0
0
Anonymous Coward

Redundancy on the cheap

I'm not an expert on UK employment laws, but as far as I can tell, if you refuse to agree to a change of contract, your employer can count that as your resignation.

In which case, I'm pretty sure a 10% pay cut or GTFO!, coming on the back of a round of redundancies, would be what ACAS would see as "Constructive Dismissal".

EDS Staffer, 10+ years.

0
0
Anonymous Coward

Take the pay cut or quit?

Have you checked out how many new unemployment claims were filed in the US last week?

There may be some of you that are lucky enough to quit and get rehired at a higher salary elsewhere. But as I am speaking from the unemployment line, I'd have been happy to have even been given the choice of taking a pay cut rather than being laid off. The calls for interviews stopped after the market tanked in the September-October 2008 time-frame, and every position I've been offered since is at half the pay I was making or less.

0
0
Boffin

Some good legal advice for UK employees

http://www.simpsonmillar.co.uk/news/news.aspx?newsid=420

What you should consider before you agree to take a pay cut

0
0
Anonymous Coward

UK Legal Position

I'm not a lawyer but my understanding is that an employer has to have employee consent to vary an employee contract. So, not consent, no pay cut. However, an employer can terminate your contract (because you are in a dispute which you are unable to resolve) if you refuse to consent and offer you a new contract on the new Terms and Conditions, in effect sacking you and re-employing you with the pay cut. The employer would then be open to a potential unfair dismissal claim.

I can't imagine HP will go through this process for the large numbers of people who are likely to refuse the pay cut. I suspect what will happen is that HP UK employees will merely be 'encouraged' to take the pay cut and support their beloved company...

0
0
Thumb Down

HP's announcement

HP took over the company I work for a few years ago they have asset stripped us, they then left the smaller contracts alone ensuring they are lost to TUPE. They turned us from a fast flexible entrepreneurial organisation into a dinosaur with all of their politics to boot. Now we have lost more contracts than we have won. Worse still is that everyone knows what happened to the dinosaurs. The company I work for also has had to make people redundant even though we have contributed to HP's success. Perhaps they could take away the several weeks holiday from some HP staff who are allegedly entitled to it and bring this more in line with normal people. Face it people we are all doomed if you work for HP!

0
0

Page:

This topic is closed for new posts.

Forums