Category: Archive

HP’s Irish workers fear for future

February 17, 2011

By Staff Reporter

That amounts to the loss of 14,500 people worldwide, as the company seeks to regain its momentum following the dismissal of Carly Fiorina as its CEO earlier this year.
HP has been one of the mainstays of Ireland’s growth in recent years, along with other major names in the technology industry including Microsoft, Dell and, more recently, Google.
Its 4000 Irish employees work across a broad range of activities, including manufacturing, sales and R&D. The company has facilities in Dublin, Galway and Leixlip, County Kildare. It also has a sales operation north of the border in Belfast.
The implications of yesterday’s announcement for the Irish workforce are not clear as yet. HP has not provided a region-by-region breakdown of where the job cuts will be made. However, such a scything of workforce numbers is almost certain to mean bad news for some Irish workers.
The cuts, which are intended to save the company $1.9 billion, are the first major move made since Mark Hurd’s appointment as CEO. Hurd’s first four months in the position had, until now, seemed low-key by comparison with his predecessor’s apparent love of the limelight.
Fiorina became one of American industry’s most high-profile CEO’s during her six-year tenure. But as time passed by she became increasingly vulnerable to suggestions that her overall strategy simply wasn’t working.
The 2002 acquisition of Compaq Computer, a move that she orchestrated and one that carried a price tag of $19 billion, did not live up to expectations. Nor did that purchase exactly boost her popularity with the workforce — it ultimately led to almost 18,000 job losses. Fiorina’s support among the HP board was said to have been on the wane for a long time before she was finally ousted in February.
HP’s share price has risen 18 percent since Hurd took over on April 1. He had argued, even before yesterday’s announcement, that the company needed to reduce its costs it if were to compete successfully against rivals like Dell. Yesterday, he emphasized that the cuts had been in the pipeline since before his appointment as CEO.
Hurd’s main action until yesterday had been to seek to untangle HP’s printing business from its PC sales and manufacturing arm. The two operations had been brought together by Fiorina with mixed results.
HP’s total global workforce numbers around 151,000. Hurd suggested that the areas that would suffer most job losses over the next 18 months were those dealing with so-called support functions, including finance and human resources.
He also announced that the company would no longer contribute to the pension plans for its US employees, a move that will be deeply unpopular with workers. HP’s chief financial officer claims the decision will save the company $300m per year. It is not yet apparent how Irish employees’ pensions will be affected.
There may be some voluntary redundancies among the job cuts. But Hurd offered little comfort to those who want to stay with the company:
“The majority of the head-count reductions will be achieved through involuntary actions,” he said.
Many people in Ireland are now wondering if they will be among the casualties.

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