EWC post meeting statement – London, November, 26th and 27th
DP 8 December 2009 23:42:13
The HP EWC met management on November 26th and 27th inEMEA management presented the business results for EMEA and the strategy for the different business areas for FY 2010. They also gave updates on several proposed programs including IT, Workplace Transformation and Total Rewards.
EWC pre-meeting overview
The sixty members of the EWC met on November 26th in
EWC members exchanged country specific information, shared the outcome of the three Workgroups (Total Rewards, Sales Compensation and IT) and worked on the initial feedback to be presented to management.
Upon request by EWC members, management agreed to train the EWC on the current job mapping programme which has mainly affected EDS employees. This training allowed the members to gain a better understanding of the issues currently encountered locally when mapping EDS jobs to the HP Job Architecture.
EWC Initial Feedback
At the beginning of the meeting EWC members stressed several key concerns of EMEA employees. Using the slides attached the EWC members stated that there were six main areas of concern (please review the slides for more detail):
? Workforce reduction in particular for the former EDS employees.
? Issues with the EDS integration, for example job mapping.
? Total Rewards in particular the salary freeze and lack of fairness in distribution of VPB/PFR.
? Forced distribution of performance ratings.
? IT and workplace transformation.
? ?Take it or leave? strategy.
Business results
Francesco Serafini showed business figures indicating that HP EMEA had suffered from the economic crisis but had maintained good profits. Overall HP EMEA has performed very well last quarter with stable or increasing profits in all domains. HP EMEA had contributed significantly to the corporate profit. EMEA also gained market share against competitors in several areas.
The economical crisis has impacted our revenue, but the cost cutting measures, as well as good margin levels have allowed HP to go through these bad times much better than our competitors with even increasing profits.
HP EMEA is now targeting growth again in a number of sectors, for example transformation of mainframes and the financial domain. The recent acquisition of 3COM should help our company to become one of the key players in the arena of networking solutions.
Workforce management
Despite these good results EMEA management informed the EWC about thousands of new job reductions. The 2900 jobs reduction will be composed of:
- 2500 job cuts for employees working for Apps and ITO in EDS:
o 1900 for ITO/BPO
o 600 for Apps
- 400 job cuts for employees working in EB, IPG and Global Functions with:
o 20 job cuts in EB sales
o 67 in IPG
o 313 in Global Function (mainly IT and Finance)
In May this year management announced the reduction of 5700 jobs for FY10 in addition to the 10000 positions already cut which were announced in September 08 after the integration with EDS. Therefore we will have lost 18000 jobs in EMEA since fall 2008 (approximately 20% of the EMEA Workforce) .
Most of the job cuts in the last 12 months resulted in layoffs or attritions (only 8% of impacted employees could be redeployed internally).
For EWC members these job losses are unacceptable: the loss of important resources generates a tremendous pressure on the employees who remain at HP, leading to work time violations, stress, burnouts and a lower quality of service to customers.
The economical crisis has been used as a pretext to accelerate the move of jobs towards low-cost regions and if not stopped this ?Bestshore? strategy will go on hurting jobs in EMEA for the foreseeable future. Indeed, with a goal to move from today?s level of 18% of the work for outsourcing projects done outside EMEA to at least 50% in the coming two years, which could affect up to 10000 jobs with our region.
EWC members strongly disagree with management when they mention the lack of performance of many employees within EMEA and the need to reach excellence in every HP business to justify its ?Bestshore? strategy. EWC members cannot accept that HP tries to justify its strategy based on purely financial metrics by making employees responsible, as if they were not working hard or well enough.
The hire of young graduates (600 have been recruited into HP in the last fiscal year) would be better news if at the same time thousands of older colleagues were not forced to leave the company.
EWC would like to remind HP not to forget its long tradition of social responsibility and asks Management to work with employee representatives and unions in all countries to revisit this best-shoring strategy. To try to mitigate as much as possible the impact on employees and their families (by redeploying people on jobs who will remain in HP or funding voluntary programs for employees who are willing to pursue their career outside our company).
As expressed in May, EWC members see little or no sign of hope as to when the economy will recover. The EMEA Workforce is unlikely to benefit from growth as new outsourcing deals, for example will just result in new layoffs among the existing and acquired employees.
IT and Workplace transformation
Management announced new initiatives to cut costs: new site closures, reducing space in HP premises by 40%, mobile phones to be limited to people who need to make business calls for more than 10hours per month, no more reimbursement of internet lines except for certified home workers etc.
Management wants at the same time to reduce space in HP premises which will mean more and more employees working partly from home. At the same time management does not want to take any responsibility for the cost associated with mobile workers (internet link, office space at home, electricity, equipment.). This is not acceptable and EWC members ask for a European negotiation for a global mobile/home working agreement.
Total Reward
Total Reward is another area where there is a high level of dissatisfaction among employees.
No good news was announced by management during the meeting in
EWC members also stressed the difficult situation for thousand of sales people whose revenue has been deeply impacted this year. EWC members disagree once more with management when they say that 2009 was a difficult year while 2008 was excellent for sales people: 2009 was excellent for shareholders as 2008 was and 2010 is likely to be.
Not only was no good news announced, but also EWC saw new potential threats on employee benefits with projects like the one to optimize the cost of healthcare. How deep will employee benefits be cut ? Management?s strategy of ?take it of leave? is certainly not the appropriate answer.
Conclusion
2009 was a difficult year for the HP employees with almost 10000 job being cut and a salary freeze. 2010 is likely to be another difficult year for employees with again heavy job cuts, increasing workload, less resources and no hope of reward for the expected good company results.
EWC members are also frustrated. Not only did EWC members not get enough information or enough time for a proper discussion (not to mention a due consultation) with management but more importantly they have the impression that the voice of the employees they represent is not taken seriously nor into consideration at any level. The EWC cannot influence management decisions when the only rule inside our company is ?take it or leave?.
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