It is not just HP EDS

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.