Aussie staff await fate after HP announce jobs cull
Aussie staff await fate after HP announce jobs cull
Jul 21, 2005: Hewlett-Packard's 2800-strong Australian workforce will have an anxious wait before hearing of their fate after a local spokesperson revealed that no decision had yet been made on how the company's US parent's decision to reduce the total workforce by 14,500 will impact local employees.
The figure of 14,500 represents around 10 percent of HP's full-time global workforce. The company said the move was designed to simplify its structure, reduce costs and place greater focus on its customers. HP expects these actions to save US$1.9 billion annually, drive growth and increase business performance.
Such a move has been anticipated since Mark Hurd replaced Carly Fiorina as CEO back in March this year, but the swiftness of the execution has come as something of a surprise.
The company claims the program simplifies HP's structure by embedding sales and marketing efforts directly into the business units, providing a tighter link with customers, as well as cutting expenditures by restructuring support functions, eliminating redundancies and modifying HP's U.S. retirement programs, which it says will free funds for reinvestment in the business. Additionally, the company says it improves individual accountability and executive focus through a simpler reporting structure with fewer management layers.
"After a thorough review of our business, we have formulated a plan that will enable HP to begin delivering its full potential," said Mark Hurd, HP chief executive officer and president. "We can perform better - for our customers and partners, our employees and our shareholders - and we will."
The dismissal of the 14,500 employees will be spread over the next six quarters.
Approximately half the expected US$1.9 billion savings will be used to offset market forces or reinvested in the business to strengthen HP's competitiveness. The remainder is anticipated to flow through to operating profit.
The company has stated that it will carefully target staff reductions, with reductions in sales positions to be minimal. There will also be little change to headcount in research and development.
The majority of staff reductions will come in support functions, such as information technology, human resources and finance. The remainder will be made inside business units, in areas where work can be reduced by improving processes and re-prioritising existing tasks.
Headcount-reduction plans will vary by country, based on local legal requirements and consultation with works councils and employee representatives, as appropriate. In conclusion, Hurd said, "Our objective is to implement these measures smoothly, with as little disruption to our business as possible. Great companies grow and reduce costs. We will do both."
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