HP Restructures, Employees See Pink

HP Restructures, Employees See Pink

2008-09-16 10:33:53

On Monday, HP made headlines when it publically announced that the company decided to cut more than 24, 600 jobs over the next three years – most of which are expected to occur within United States. The move was a result of the recent acquisition of Texas-headquartered EDS which according to the Business Journal marked “the largest acquisition by value in the IT services sector.” HP stock dropped 3.49% at the closing bell Monday.

Consolidation of any size is tough on employees but when the companies are the size and scope of these two, the effects are generally felt far and wide as evidenced by the estimated size of layoffs. The implications for morale impact are high, especially saddled with the already low ratings EDS and HP have as independent companies. EDS CEO Ron Rittenmeyer has been among the lowest rated CEOs on Glassdoor.com since our launch with just 14% approval rating (more than 65% disapprove) While Mark Hurd has a higher percentage of employees that approve of his performance at 44%, the low company ratings are near neck and neck — with EDS at 2.6 and HP at 2.8.


What does this mean for the short-term horizon? We expect to see employee sentiment at HP and EDS deteriorate in the near term and thought we’d share some of the employee advice to senior management in case anyone at HP is listening.

Top advice to Hewlett Packard senior management from employees:

  • Cultivate and keep talent: “There is so much potential here, yet we continue to see these amazing, successful people drifting away from HP. You must be seeing it. I’m talking people who hit their numbers, are supportive team members and all-around rock stars who should be promoted. I can honestly say that every person on my team is passively or actively job hunting given frustration over either a) absurdly below-market-rate compensation for their work or b) lack of options for career growth, or both.”
  • Share the wealth: “Senior management stock bonus programs are great, but the average employee at HP has none. Share the wealth would be the bottom line I guess I would tell them. Let us share in the satisfaction of doing well for the company, by supporting the company with stock options at the very least.”
  • Care more about the customers: “Employees need to be empowered to do what is right for customers. Company is often too process-driven. Not that process is bad, it is very necessary in large company operation, but when nimble, customer-focused decision-making gives way to long, drawn-out discussions, endless approvals and often inflexible process flows, it is customer loyalty that ultimately suffers.”

It’s important not to forget that at the same time HP is managing employees out, they’re managing EDS employees in. It will be important to understand the frame of mind of these employees as they’re generally disenfranchised and dissatisfied as workforce.

We’ve lived through our own integrations in past lives and know the road ahead will be challenging and invite employees of HP/EDS to share their experiences.

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