Hewlett Packard isn’t doing so well like ever other consumer electronic company. Profit and sales are down, blah, blah, blah. You know the drill. Anyway, instead of laying off the 20,000 people like the financials indicate, the company is issuing company wide pay cuts starting at the top.
CEO Mark Hurd is giving himself a modest 20 percent pay cut (he earned $42.5 million in total compensation last year, btw) and the pay cuts decrease from there. The Executive Council’s pay checks will be 15 percent lighter soon, other executive’s 10 percent less, 5 percent for exempt employees, and 2.5 for non-exempt drones.
Who knows if this strategy will fix or even solve HP’s money from going down the drain but at least folks still have a job. Getting a pay cut is hella lot better than standing in the soup line. Here’s an idea though, cut the CEO’s total compensation by 80% and give everyone a raise.
I like the idea better, though no one wants a pay cut. Like you said, it beats the unemployment shuffle, though only barely.
This is a brilliant move on Hurd’s part. As others cut their sales force, leaving accounts to be managed by resellers, Hurd is poised to clean their clocks. When the economy turns around, HP will have the feet on the street to serve their client base without having to rehire and ramp up to speed the new hirees.
Steven. The move isn’t brilliant. Layoffs continue. More being announced late this week
And more layoffs today……………..a lot more. Mark Hurd is a liar.
At least with unemployment, you know how much money will be in next week’s check.
HP paycheck’s are now depreciating like thrid world currency.
Management 101. NEVER, NEVER create a situation where you have 300,000 upset employees. The sad fact is that people will eventually forget about the poor guy next to them that got let go. They NEVER forget a pay reduction. When HP was primarily a product company it might have worked – but EDS is a service company that makes its profit from the little guy. One fully billable mid-range resource can bill up to 500,000 a year. Do you think this person will be going the extra mile when they now earn less than they did 5 years ago?
42 million and only getting a 20 percent paycut? Leaving him with 32 million? I mean really what the jeck do these CEO do that’s so special to be earning 32 million dollars a year? I would not say they have no talent or don’t do anything but c’mon these compesations are outrageous.
Is the 20% pay cut from his total yearly compensation, or just base salary?
I work for HP, which is why I’m writing anonymously. The 20% is to Hurd’s BASE SALARY, not total compensation. So this guy will get getting $290K chopped off $1.45 million, but will retain the rest of the compensation (he will still make $40 million + per year). Yet I will be getting a 5% reduction and that is to my total pay. The worker bees like me don’t get bonuses and since I was acquired by HP as part of the EDS merger, nothing has impressed me about HP. EDS paid their employees more and we had better benefits. Hurd’s executive compensation is exactly the type of frivilous spending that Obama is talking about – and I’m not even an Obama supporter.
It took years of 1-2% per year raises to get me to where I am now…now, with one fell swoop, all that hard work is for not.
Bonus is not going to happen this year and the rest is in stock which is not doing too well either,
The 20% paycut for Mark Hurd is on his “salary” which is like $750K so the cut is $150k for him. Negligable.
20% is against the base-pay salary, that is 1.5$ million. so the cut is 300K. Last year the CEO got 42M $ in bonuses. So, his pay cut is less than 1% of the total salary.
no comment……
Salary cut is better than lay off. Lay off will push up the unemployment rate, and cause a vicious circle.
Seriously, at least with a job, people could still buy crap and the economy wouldn’t be in a shambles…
No bonuses for all at HP they were eliminated for everyone. So Hurd’s out 42 mill plus the 300K. If this works and he saves 20,000 jobs others should be looking at the same options vs cutting experinced employees.
The pay cuts should be at the top and leave the drones alone. Where were the big bonuses for the working stiffs when these companies were raking in big profits. These types of pay cuts will continue as long as we allow them to. Are these companies losing money, or are they just not growing sales at the rate they forcast? Let the stock holders take the hit, not the folks who are actually working for their money.
I fear the working class in this country have become a bunch of sheep willing to follow wherever they are led.
“You are lucky to have a job, now take this moldy bread and keep working peasant”.
Give me a break
Being an EDS employee and having watched my pay check slowly shrink due to inflation and now this pay cut and benefits reduction, I am finally going to do something about it and find a better job.
HP buying EDS was the worse think for its employees. Since HP bought EDS, they froze our pension, gave us a 401K increase, less than what HP employees were receiving, then promply took that away along with a 5% paycut. My gross pay has been cut by 17.5% since HP took over. And this was in our best interest. Now that we got rid of Rittenmeyer at a cost of over $58M and the rest of his cronies. Spin us back off, so that we can get back to treating our employees fairly, growing our business, and providing value for our clients.
Give us a salary range where all employees are paid within 10x of our chief executive and you’ll see a workforce that will bust is gut to grow the business and bring innovation and success to our clients like never before. An don’t say it can’t be done … It can and should. Have Wall street an edict out to say, executive salaries should not exceed 10x the median paid worker would be a boost to our economy and to all stocks.
Since 8/27/08 when HP took over EDS, my pension is pretty much dead, there is nothing for 401k matches, and I’ve taken a 25% pay cut. Talk about corporate raiders…
I don’t know how much “stuff” other people can buy with all those things hitting at once, I can’t even get my landlord to renew my lease because, (and I quote from the landlord) “you know the toilet paper in my closet has at least maintaned it’s value over the last few months, that’s more I can say for your paycheck. and the TP doesn’t have to work nearly as hard as you do”.
Obviously the EDS payscale was much higher than the HP pay scale. EDS has an attitude that they are BETTER than HP employees. There is a lot of talent within HP as well as EDS. EDS EMPLOYEES FIND ANOTHER JOB IF YOU ARE UNHAPPY SO WE CAN SAVE MORE JOBS WITHIN HP. REMEMBER EDS IS AN HP COMPANY NOT THE OTHER WAY AROUND. HP BOUGHT EDS.
As an EDS employee basically since 1983, I will say that I do not feel that I am better than HP employees but would like to know how come HP, being the wonderful company that you think it is, HAD TO BUY EDS TO KEEP AFLOAT BECAUSE THEIR HARDWARE BUSINESS ISNT DOING SO WELL AND THEY WANT TO DO WHAT EDS DOES??
Am I better? NO. Should I have to be impacted and brought down because I have to fall in line with HP’s lack of employee recognition? Still a NO!
Hurd’s using the economy as an excuse. While other companies use pay cuts as a last ditch measure to save a company from going into liquidation Hurd uses the tactic as a means of maintaining or increasing profit. HP did it in 1998, 2001, 2004 and now they are doing it again in 2009. It’s a way of life with HP.
To US staff the fact that EU staff have to be “asked” to “consent” to the cut will seemover generous. But the reality is that it’s metaphorically little different from a rapist holding a knife to a girls throat and asking her to smile through the ordeal. In the end we’ll have no choice but to accept or risk discrimination.
The absorption of EDS into HP was already going to do nothing to improve anyone’s pay or conditions. Charges associated with our acquisition had reduced the HP shareholders cut from an anticipated $0.93 to $0.96 a share to around $0.74 a share on Q4 08 figures. Add to that the fact that EDSers generally cost more to employ, remembering also that we are a service provider not a hardware supllier and the only ones to have returned increased profits!, and HP were always going to screw us down in terms of pay and conditions to make us pay for our own takeover even before every CEOs dream excuse, recession, came along to reduce the already scant scrutiny that these people get.
In summary we have a 5% cut now. No idea what they are going to steal off usin Jan 10 (pensions, allowances, anither 5%) and rock bottom morale.
I’m cheesed off, my boss is cheesed off, my teams are cheesed off. How do I motivate anyone?
There is one bright side to all of this – The “Pay for Performance” myth has finally been destroyed. You are paid what they can get away with, it’s as simple as that. We now have the proof to show that.
HP gave Mark Hurd $25.4 million in cash last year, including a $1.45 million salary and $23.9 million in bonus money. Plus stock awards worth
$7.9 million, $738,392 plus miscellaneous items, including $98,000 dividends paid on his restricted stock holdings and $71,482 of relocation compensation. The total amount of pure money he cashed in 2008 is $42,5 million US dollars. And personal and home security $256,000 plus personal use of HP’s corporate jet $135,734… And now he wants his employees to cut 5% of their base pay without even guaranteeing their jobs? He offered to cut 20% of his base pay, which is $1,450,000 so 20% of that is $290,000 which is only 0.6% of his total income, not 20%. What a prick.
Hurd is likely to get a bonus this year as well – that’s why he is cutting everyone salaries – in an effort to get a bonus (and raise HP stock price). Also, he is a bit hypocritical when he says that he should have cut 20% of jobs (my department already had a 30% job cut this year anyway). I wonder if there is a formula which says what reduction in salary/benefits will result in what %attrition rate growth.
Also, EDS acquisiton is very important to Hurd but he has no clue about inventing (HP’s motto by the way). The only way Hurd knows how to increase shareholder value is buy acquring companies with “less than optimal” cost structure and reducing the bottom line. This is obviously a non-sustainable tactic.
If Hurd doesn’t know how to innovate himself at least he could reward individual contributors with stock options for significant innovations. I’m not saying that people should get stock options just for being there during the economic boom (like Hurd and executives do) but if they do something new and useful that should be rewarded.
Anyway, it is useless to complain, because the big hypocrite Mr. Hurd doesn’t give a damn even though he says employee fedback is important – this is getting more and more hilarious every time I hear that. The only useful thing you can do is acquire new skills and strive for promotion if not with HP than with another company.
Too many typos in my previous POST make it difficult to read:
Hurd is likely to get a bonus this year as well – that’s why he is cutting everyone’s salaries – in an effort to get a bonus (and raise HP stock price). Also, he is a bit hypocritical when he says that he should have cut 20% of jobs (my department already had a 30% job cut this year anyway). I wonder if there is a formula which says what reduction in salary/benefits will result in what %attrition rate growth.
EDS acquisition is very important to Hurd because he has no clue about inventing (HP’s motto by the way). The only way Hurd knows how to increase shareholder value is by acquiring companies with “less than optimal” cost structure and reducing the bottom line. This is obviously a non-sustainable tactic.
If Hurd doesn’t know how to innovate himself at least he could reward individual contributors with stock options for significant innovations. I’m not saying that people should get stock options just for being there during the economic boom (like Hurd and executives do) but if they do something new and useful that should be rewarded.
Anyway, it is useless to complain, because the big hypocrite Mr. Hurd doesn’t give a damn even though he says employee feedback is important – this is getting more and more hilarious every time I hear that. The only useful thing you can do is acquire new skills and strive for promotion if not with HP then with another company.
I can’t believe some people still think Mark Hurd is a good CEO, or that he’s positioning HP to somehow ‘win’ after this is all over. Under his management he’s outsourced all development and research work, and shut down the fabs. For a technology company this means he’s sold the future. The work of CEOs and boards like HP’s will leave America reeling decades from now when we find ourselves owning nothing but debt.
HP is only a service company now, but as long as there’s some milk left Hurd will stay around for the cash cow.
EDS announced today they are cutting pay an
additional 10% on top of the 5% announced
earlier. It seems the company figures if it
can’t get customers to pay Mark Hurd’s ridiculous bonuses it can just milk the
employees dry. I’m now making less than what I
was making when I hired into EDS in 2001. At
that time, the expectation was 45-48 hours of
work with a weekend or two of work per month.
I’m now working 70 hour weeks (as are the rest
of my co-workers on the GM account). The the pay
cuts are only being forced on US and Puerto
Rico employees. Elsewhere, employees are
protected by their countries’ laws and won’t
have their pay cut unless they “volunteer”. I guess this means HP employees around the globe aren’t willing to give up their fair share to save jobs, so US
employees are being forced to shoulder an
unfair share (and the world calls us ugly Americans). Additionally, only
EDS employees (not HP) are being targeted with
this additional 10% cut. Apparently we EDS
employees are second rate citizens at HP. There
is no value in being an expendable human
resource for a large corporation. Regardless
of the hours we work, our salaries are fixed
and there is always an excuse as to why raises
or bonuses aren’t available. The way I figure
it, if I’m being paid less than I was paid 8 years ago (for fewer hours back then), my productivity
needs to decrease accordingly. Work more than 45 hours a week…hah. I feel carpel tunnel settling in. I hope HP has paid its insurance premiums.
Don’t forget to keep fresh batteries in those pagers ;-) RTOP… RTOP.. Wher’d all the profit go!
Obviously EDS personnel make too much money compared to the employees at HP that do the same job. May explain the additional cut. Plus I heard its only for the month of April.
Many of the EDS people that have been laid off are not doing the same job as anyone at HP. Most recently, my job as a computer programmer, analyst, team lead, etc etc etc was for a client with very unique requirements and business needs. My knowledge and ability to address that unique business need is not something that any HP employee is doing. HP continues the spread sheet approach to making layoffs. They aren’t doing the needed leg work to know the real impact this approach is making. It’s no surprise that IBM is getting so many of the contracts. Their seeing the opportunity and taking it.
Hot off the press 3/13 … for ex-EDS employees residing in the USA or Puerto Rico, you get an additional 10% cut for the month of April!
Yep–so April will see a 15% pay CUT in salary. They ended the pension, froze the 401k contributions, ended telecommuter expense reimbursements, ended tuition benefits, and now they want a 10% “temporary” pay cut for April for THE ONLY PROFITABLE DIVISION IN HP.
EDS Business unit employees only (U.S. and PR) experience this lovely “temporary” 10% cut. Anyone want to bet on how quickly that will be permanent?
The additional 10% cut in April for the only money making division within HP makes me wonder how Mark Hurd can look himself in the mirror. Although I wouldn’t be happy with any additional pay cuts, I would have at least been less pissed off if it was accross the board and include HP employees. “EDS leadership” sending a late Friday Email unsigned is another kick in the ass. EDS’ers are HP’s most liquid assett. What a joke.
Did HP offer any stocks in lieu of pay cut?
not only did they not offer stocks… they cut the employee stock puchase benefit completely!
EDS is not the only profit engine within HP. This is a false statement. HP’s Public Sector division continues to show growth and exceed quota.
Yes Ned, The EDS division was not the only profit center. But with the numbers in and filed with the SEC, EDS accounted for 1.1B of the 2.08B USD in profit that HP declared for the first quarter of the year. Let’s bring those numbers into perspective here, the division that brought in the largest chunk of profit for HP, took an additional cut in pay of 10% above and beyond the initial 5%, with the comment from Eazor the weasel that it may happen again.
EDS employees are no better or worse than HP employees, and were traditionally kept around 20% behind the national average for their position. Comparing what I know, is that HP employees have suffered under Hurd since the last worthless CEO left, and that while their salaries weren’t stellar, they were at least more in line with national/regional averages.
There’s been a lot of protectionism of HP employees throughout the integration process, and there have been many very good EDS employees let go along with the deadwood.
If you want to continue to defend the actions that leadership has taken so far, so be it, but make sure you have your information right.
What Mark and and his HP leaders fail to realize is that a small % of EDS employees could “correct” his cost savings in about 90 days. I guess since printer ink doesn’t come with SLA’s they wouldn’t have thought about that. Time will tell.. Luckily I’m not a US employee so it’s not quite as painful.. I feel for you guys.
All these things are sad, but very true. HP is no longer the great company it once was. I guess it’s true, the HP Way died with its founding fathers. While I’d like to give Hurd the benefit of the doubt, I’m betting that all these changes become the new standard at HP. The good news, is there are better companies out there. I just got a job offer to leave HP, which would give my self a 15K raise.
HP used to have great customer support as well as a great product. Unfortunately it appears the quality of their products as well as their support services have declined to the point they are not worth buying or even considering any more. Which is why they are losing value and market share. They certainly don’t beleive in customer support or rentention of customers any more.
Very sad.
It is so sad that a company like HP has reslut to greed,Thousand of workers ge up every morning ,day and night to keep this company work,yet HP feel they are doing fair by it;s workers by taking the bread out of their workers families mouths. you are one of the seven sins and that is greed. Surely it is better to have a job and not unemployment. But to the higer ups are you really thiking about your workers,I can see it if you gave each worker a bonus to prepare them for the cut. Think of the workers for once and stop seeing us as your work slaves that need this job.
I am sadden by what one of the greatest Companies in America is doing. shattering the hope and dream of many who has join the Hp family.Like myself I join this company in hope that i can grow here and live out my dream, of course the economy is bad, but why take our hope to feed our family,and have a home, I am a single parent, and every dime helps. I pray for the top guy who is paying himself millions, I pray for people like me who live their lives from pay check to pay check,Greed is alive in Hp and in every company that abandon their employees to fend for themselves after they have given their all to Hp
I was laid off from EDS, an HP company in 2009, just a few days AFTER listening to Mark Hurd discuss the pay cuts (both permanent and “”temporary”") and how this approach is an attept to deter the need for further layoffs. Obviously the decision to “eliminate my position” (yea right…). It was just rude. Where’s the dignity and respect? I wish the economy were better. There would be so many good people getting out. These companies haven’t done anything to retain the top performeres, quite the opposite, but now, due to the economy, people feel stuck.
I’ll be looking for my bonus pay (ha!) since I’m obviously contributing to HP/EDS meeting their 2009 objectives, one of which includes sending more US jobs “elsewhere”.
The paycuts are merely a means of redistributing money from the regular income of many employees to the Bonus checks of few. Shame on them.
HP is having layoffs…don’tbe fooled..workforce optimization and workforce transformation is what they call it..tons of jobs going offshore with the US losing many many jobs…India is the new workplace..labor is veryh cheap and the workforce is not on HP’s headcount…
Know what you are saying before you write something.
Yes HP is cutting wages, and they are still cutting the 20,000 jobs as stated.
I work for HP and I got my pay cut, then I got laid off last week. They have been laying people off all year, just very quietly. It’s just the norm for a big company like HP.
i work for EDS..soon not to be! and i started here promised to be making a certain amount an hour. and of course i never did. Now-i make almost min. wage.
HP and EDS are going down. thats why im looking for another job
I took the 5% pay cut and then the temporary 10% pay cut. All this to avoid layoffs. But I was laid off on June 30. I was part of EDS. It does continue quietly.
*snort* The pay cuts will help HP with all future layoffs. They’ve already cut the size of the severance package down on it’s face, reducing your salary means they are cutting it further. Actually reducing your salary means they have to bank less money for vacation, any potential bonuses based on your pay are smaller, matched 401k contributions are smaller – for HP leadership, it’s a win-win situation. For those still toiling at HP thinking you’ll eventually come out of the darkness – wake up and smell the coffee. Compaq was a lay-off culture company – they did it every 6-18 months like clock-work. HP learned a new trick when it bought Compaq.
For as long as you work there, you’ll never feel security.
Yeah I am an EDSER/HP Employee,My hands have been crossed since last years layoffs and the other 3 layoffs that wasn’t suppose to happen. My fingers are in pain as I keep them cross praying that this stops soon and very soon…the minute I’m called by my manager I’m taking all my items with me, so I can just walk out the front door.
Kat,Ocala fl
I believe the job cuts and pay cuts will kill HP’s chances of being the number 1 Computer Company in the world. I’m betting on Big Blue to wipe HP off the map in the coming years. Since all the talented HP employees that were laid off will start getting picked up by IBM and other competitors.
Here’s my bet:
IBM Global Services = Winner
HP Enterprise Services = Loser
Mark Hurd should be fired before it’s too late.
Anshuman Kar harassed Indian Girls on Foreign Land
Girl Harassed by Investment consultant in USA, Atlanta.
How a White Collar Man becomes a Black Horse on Foreign Territory?
Of late instance of grooms who come to India for arranged marriages and marry Indian girls is becoming very common. They select such spouses who are from middle class family and bank on their appearance to make the walk through. They choose to marry according to Hindu rites and yet do not go for registration taking loopholes of laws in states where registration is not compulsory despite law commission’s warning. The parents are duped along with girls since they are told to trust the other side. When the girl goes back to USA she is asked to stay like a mistress, while before she leaves for off shore her wealth and valuables are taken away by her in laws along with Stridhan are taken away. All this is justified on grounds of tradition, family customs and none ever dare to tear this saga of exploitation. The story goes on and on and girls are sacrificed to male ego and are seen as a commodity like in a commodity exchange with a price tag. The American laws become a convenient tool to discard the spouse and get rid of her, since it gives a liberal exit from stringent marriage laws of India, where the obligations are manifold and the process very tardy to escape the bond of staying together. Yet the smart moves take a beginning to escape the Indian marriage laws and dishonor it in practice. This is done in a cold blooded manner with tacit support of greedy parents who like to lynch a girl on every occasion every moment. The groom is placed well and earns well but has the mind set of an escapade from duties of a husband and makes himself a trophy in market of marriage to lure, cheat and flout Indian laws. The National commission on women and foreign offices abroad are supposed to be protective towards our women but fail to do so due to limitations of laws and prevalence of liberalism in personal laws on such territories. The setting becomes very propitious for fish catchers who do fishing on foreign waters with no liabilities towards home or the country of origin or its customs and escape with the booty, until the spouse sacrifices her earnings or loan money to fight the person and claim for her rights which takes a huge toll on her youth and career and modesty or dignity.
Such cases a re becoming very common and the persons who do this are from Wharton schools also and work in McKenzie company where there is no dearth of incomes or opportunities. The case of Anshuman Kar who married an Indian girl, whom he chose himself after making himself appear as a genuine Indian groom follows the same story line above and when any resistance is made, that strikes at the roots of their ambitions or hidden desires the lambasting of everyone takes place to defend their family and again a case is repeated to make such cases more and more. The question is how long the laws can be betrayed and how the families of the girl side can get empowered to recall the person who makes their life a story of trauma to face trial in Indian soil under special extradition arrangements to put a stop to this wheel within wheel episodes of Indian tragedies.
How can Indian women seek to get remedies through the legal system there according to Indian laws, till such time they are not foreign citizens?
Do not we need to stand up and say that the spit and spat phenomena of such families need to be strongly dealt with if women power has to assert to a position at global level, since Indians in US are 1/6th of populace.?
Should we not expect organizations and Indian societies to come together to help such women who are exploited and left alone and vulnerable like a mistress in distress and put an end to women trafficking by well educated persons like Anshuman Kar in guise of holy marriage.
All Indians are aware of the need to fight the gender exploitation since the girl child is killed before she is born, made to bear all obligations alone, blamed for giving birth to female child, burnt alive also for not getting dowry and harassed for refusing to turn a source of funding. Even abroad this story is getting true with new methods and if we need to stand tall as a nation because shakti is worshipped, do not we expect the educated Indian gentry to gang up and isolate such dark horses trotting foreign soil and bringing shame to our revered country that stands like a legion for family system.
Where do the parents seek for relief against individuals who become tricksters to escape Indian laws through foreign doors?
All talk of layoffs and recession in USA but this rogue Anshuman Kar of wharton school has found this brilliant idea of trafficking indian girls in the name of marriage ….please expose this guy who has ruined the life of my cousin
Hello Sunita, is this true? I was shocked and I am in utter disbelief after hearing about this tragidy with my dear friend Sunaina. She is a wonderful person, very lively, simple and loving. If this is true, the guy is a true shame for India. When we decide who to marry, i think the decision should lay highest importance on fundamental human values, rather than degrees, qualification, citizenship and earnings. While taking such most important life changing decisions if the fundamental human values are not priority no.1 many a times such kind of rogue takes advtange of situation and don’t think twice before ruining someone’s life. On how to change suppression against women in India I will say the change will start only when when we change our self first. Stop giving dowries, it is a sin give dowries. I have decided that, in near future whenever I will marry someone, I will definitely put a condition for girl’s parents not to spend a penny on girl’s marriage. Upbringing, educating, making a girl independent and then doing kanyadaan itself is the most humble and huge sacrifice for girl’s parents. How can even the guys think of dowry? Having said that, I believe givers of dowry is equaly responsible to promote such greediness in our scieties. Change must first begin within us. Please do keep in touch.
Thank you
Harish