HP, EDS slash internal spending HP owes EDS more than a little thanks for its respectable fourth quarter. But that hasn't stopped the IT giant from putting the financial squeeze on its new acquisition. In a recent internal memo leaked to The Reg, EDS CEO Ron Rittenmeyer lays down "a series of corporate-wide actions to reduce discretionary spending." …
But Actually I'm happy this has been announced.
I don't know what Ron and Mark earn - frankly I dont care.
The desicion to cut costs, even if cutting pay raises is a great move. Would i rather give up a pay raise and not have to have more redundancies for my collegues - of course I would. The Economy is screwed, G.Brown has announced a plan to secure mortgages for 2 years - I think that gives you an idea of what we are facing here.
Things are bad - and the moment you bored sysadmins, who sit on El Reg all day every day, posting comments that to me read "The world owes me a living" (while complaining they have too much work to do) realise that this isnt the case and get on with some work the world will be a better place.
You are the same people who like cheap supermarkets, taking advantage of under priced goods, which take advantage of the same ethos - i.e. source from lowest price suppliers.
A job is not for life anymore - get over it an move on. You got your training - good for you - and your moving on - good for you - your playing the game - but don't look back in anger and think you won because you're leaving - thats not the way it works....
You're newly found (EDS funded) skills will be out of date in approx 2 years and you'll have to play the game again.
As recently announced, in 2008 HP delivered a strong performance relative to the competition and in difficult market conditions. And as I mentioned in my e-mail last week, EDS – in the two months following the close of the acquisition – was a contributor to HP’s success. I thank all of you for your contributions to this effort.
As we head into FY09, we have the opportunity to further differentiate HP and EDS, an HP company, in the marketplace – but it won't be easy. To ensure that we can continue executing our strategy, competing for business and serving our clients, there are now a series of corporate-wide actions to reduce discretionary spending. These actions are equivalent to those being undertaken and announced by HP’s other business groups.
Effective immediately and until further notice, we will:
o Manage our Total Rewards costs
# Service Award events will be discontinued for all service anniversaries that occur 1 January 2009 or later (Service Awards/gifts will continue until the EDS program is merged with the HP eAwards in 2009).
# Comprehensive benefit reviews will continue on a country-by-country basis to harmonize EDS and HP offerings, based on market practice.
# All EDS global employee recognition awards (i.e., AMEX and Hallmark gift cards, debit cards, EDS merchandise, etc.) will be suspended, effective immediately.
# Salary increases scheduled for 1 February '09 (HP's Focal Point Review) will not occur, except where legally required.
o Limit hiring to revenue-generating positions only
o Reduce agency and contractor spend
o Limit company travel to customer activities only
# Internal meetings need to be conducted virtually.
# Recognition and learning & development programs are also affected.
These are difficult actions, but they are necessary in the current global economic environment. With all of us pulling together, we have an opportunity to increase market share and emerge from this downturn in a stronger competitive position.
Great companies rise to the top in difficult times, such as these. I am confident we have the people, dedication and tenacity to meet and exceed this challenge.
So are you saying he would be better to run the company like say Jonathan Schwartz at Sun? Not make any job cuts until the company is on its knees?
Tough times call for tough leaders - thats no comfort to those that lose their jobs I know, but which is better - cut 24,000 jobs now, or 50,000 in 2 years time?
And yes, he's paid too much - the same as the leaders of every global corp - that'll change as shareholders demand more value - just not overnight.
The same story is being repeated at other IT consulting companies. The corporate staff telling the UK execs to work the peons harder and harder.
And with startling lack of insight or awareness, these emails are always sandwiched by "you're doing a great job, best in the world, we've got better results than ever before" messages. And they think this motivates the staff.
As for people moving on - good for you, but I don't know which greener grass you can see over the fence. Its probably been spray painted by those working in corporate PR.
Travel ban hurts quite a lot.
Basically means that no-one can go on any kind of training course that involves travel. Even if all of the travel expenses are claimable, they simply don't want it on the books. There are people with EmC training passports through EDS who now have to watch the clock tick-away as thousands of pounds worth of training purchases are wasted. Perhaps worse for those who expect traiing in '09 who simply won't get it whilst this ban is in effect. Which it has been for the best part of 2 months now.
As far as the VR scheme goes, they're still being inundated with requests for quotes, mostly from long termers and the large number of feckless, lazy, former civil servants who are sitting on the their gold embossed final salary pension schemes.
At least this means that we'll get rid of some of the worthless, hopeless and parasitic scum-contractors that currently infest this account.
Not that I'm bitter at all.
It is a fact that EDS is being deliberately damaged by HP. It is already impossible for EDS to deliver on its MOD projects, and further cuts are being enforced. Hurd and Rittenmeyer will increase apparent profitability and get bonuses, MOD projects here in the UK will not deliver. But hey, they are just customers, so they don't matter.
They are all doing it-- cutting everything discretionary and toking off merit raises, travel, any workers who don't directly bring in revenue, you name it.
The problem all these companies is colliding with now, is that (in the US) the GSA pay raise last year was 3.97% (NE US), while private IT was maybe 1/2 of that. And, most private IT has ditched pensions and retirement medical long ago (I know, you bloaks in UK and EU get yours, but not in the US). Guess what? The Federal compensation exceeds the private compensation in many cases.
I'm currently digging up the numbers considering moving to a job with a future-- with the government. Let the private companies hire the best of the bottom of the graduating classes (the ones no one else will hire, not even the government) and outsource to their hearts content. You get what you pay for, and private industry isn't paying.
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