HP begins selling pay cut plan to European workers Hewlett-Packard has begun the tricky task of convincing its workers in the UK and Europe to voluntarily take a pay cut. The vendor announced yesterday that it was pursuing a company wide pay cut as an alternative to redundancies as it negotiates the current economic downturn. But while US law gives the firm some latitude to …
"As we reported yesterday, HP’s CEO Mark Hurd has taken a 20 per cent cut in his base salary, while other execs will see their pay fall by 10 to 15 per cent"
What they fail to point out is that the valiant paycut of 20% is on his base salary (which is around the 1million mark) equating to around 200k. Awwww, sounds a lot huh? Now tally that with his annual bonus for last year, reported around 42 million.
My heart bleeds.
I'd get my coat, but if they get away with this I won't be able to afford one.
It is those profits that are driving share prices (well, stopping the share prices crashing quite so hard) and keeping the pension going (OK, not failing as badly). You can't have it both way.
No company can pay big wages, make small profits and sustain a decent share price; and pensions cannot return on investment unless shares are sustainable and growing (the pensions industry being huge investors).
The big "shares fat cats" that lots of the unions moan about are the pensions companies and it is the unions' members who directly benefit.
Unions are living in cloud-cuckoo-land and have no place in the 21st century.
As to the pay cuts - I agree that the cut should be for everything (pay, perks, bonuses etc) and apply to all.
Let's just say, for the sake of argument, that running a household costs you about, oooh £1000 per month including mortgage, food & bills. That's £12,000 per year.
The average wage is £25,000. Less tax, that's about £18,000. Taking off our living costs, we get £6,000 to spend, or about £500 per month.
So if an average wage earner takes a 20% reduction in salary, that takes him down to £20,000, after tax that's about £15,000. Less our £12,000 expenses give £3,000, or £250 per month.
Basically, you have just halved our average person's disposable income.
If you earn £1,000,000 a year, you have about £650,000 after tax, less expenses gives £53,000 per month to spend. Taking a 20% pay cut gives £42,000 per month, a reduction of, well, more or less 20%
My point? A 20% pay cut to a normal worker is a kick in the crotch compared to a slight finger-wagging for an exec.
And I wonder if the workers' pay will bounce back to pre-crunch levels once the battle is over?
Does that mean we can all have our debts cut as well. If HP does this, then IBM will, followed by Accenture and the rest.
Economics 101, cut salaries and there's even less money in the economy because more of it goes to paying back your mortgage, thus less discretionary spend on ink cartridges. sure some people get to keep their jobs longer, but actually they would be better off with a severance package. This way more of us get bigger debts, and of because we've had a pay cut when we finally get made redundant, we get a smaller severance.
I'd take a 10% pay cut if all my debts were cut by 10% as well.
To the guy who eloquently stated that unions have no place in 21st century - why dont you go work in a country without trade unions? You will find the longer hours mean you wont have enough time to spout gibberish.
Now, more than ever, it is imperative that workers are united and have collective bargaining status with massive global companies which are STILL making huge profits and STILL paying huge bonuses to directors. The remuneration gap between blue/white collar workers and directors/upper management is widening in countries without trade unions, its the true mark of a developed and cultured society that wealth is distributed fairly among its citizens.
ps I hope you weren't being sarcastic...
That this is done on an individual, confidential basis makes it a doomed effort. Of course no one will voluntarily cut their pay if others in the office are free not to. It should be put to a company wide vote, accept a 10% wage cut or 10% across the board force reduction. Then workers would consider the pay cut seriously.
According to a regulatory filing made yesterday, the compensation figures reveal that Hurd received $1.5 million in salary, a bonus of $5.3 million, $18.6 million in non-stock incentive plan compensation, awarded $12.9 million in stock and a $4.2 million in option awards, pension payments and expenses.
Total $42.5m in 2008
Who in the right mind would agree to a pay cut. They've just made people redundant anyway. A lot have been directly replaced by agency workers, I didn't think this was legal but I don't like in Hurd land.
Mark Hurd, you can suck my scabby cock if you think you're getting me to agree to a pay cunt.
I think there should be a Celebrity Deathmatch style fight between HP and Microsoft.
The winner gets to call themselves the TRUE evil "Beast" of the computing world...
p.s where's the icon with HP (or HP head honcho) depicted as a horned devil?
Seriously, HP used to be known as a "good" company to work for, and it's founders were keen on investing in people. The HP of today is a shower of sh*te, burning bridges with employees, resellers and distributors as it goes hell for leather in search of the quick buck.
First it was moving to "performance related pay" via bonuses, then employees were told it would x amount of years before they got a bonus (therefore a rise) and now they're being asked to take a pay cut!!!
Wow. Where do I sign up?
I'm afraid it is not as 'confidential' as some think - Those not 'consenting' will be noted down & their direct management notified - so basically, any manager further up the 'chain' will know who did / did not sign up for it.
The immediate manager will then enter into 'discussions' with the person not consenting to 'impress on them the importance of consenting'.
The other thing to note is that this is a permanent cut - they have given no commitments what so ever regarding a reversal of the cuts
Anon, just because, well you know...
They've already identified further "synergy" cost-savings through the EDS acquisition. So this sounds like a good way to get the next round of EMEA redundancies through at a lower cost...
Less pay on redundancy = less notice period pay + less enchanced redundancy payment
Only a complete dope would take this pay cut.
Conclusion... start preparing your CVs!
I worked for HP - a while ago - under that moron Carly. Difficult times, and we were offered a 10% pay cut (to save jobs) - and yes I have copies of the emails. Like many (actually most) of my colleagues I took the voluntary pay cut. 2 weeks later HP cut lots of jobs. They lied. We knew they lied, they knew they were lying. Talking to people within HP Europe the general feeling on taking reductions can be summed up as 'FECK ORF' you are going to screw us anyway.
Paris, because at least she appeared to enjoyed being screwed.
Yet another example of a greedy American corporation - still making profit but wants that little bit more.
If I agreed to a pay cut I'd want something in writing to protect my job, but also to outline the timescales of returning my pay to its original levels. Also, what are HP going to compensate workers for those losses when profit returns to what is consider to be responsible by Mr Turd.
I wonder how many people will be off once the market picks back up - can the last one out of HP please turn off the lights......
Mark Hurd, $25.4 million in cash last year (2008), including a $1.45 million salary and $23.9 million in bonus money, according to compensation figures contained in the company’s proxy which it filed late on Inauguration Day.
Throw in stock awards that the company valued at $7.9 million, and don’t forget $738,392 in other miscellaneous items, including $98,000 worth of dividends paid on his restricted stock holdings and $71,482 of “relocation” compensation paid out to Hurd, who joined the company more than three years ago.
HP’s proxy presents the 2008 compensation two ways and comes up with different totals, depending on how you count it up. According to the compensation committee’s view of things, they paid Hurd $23.3 million during fiscal 2008. However, the company reported compensation paid to Hurd of $42.5 million, including incentive payments earned from prior years but paid in 2008.
Now for the Math
20% of 1.45 million = $29000
Total Compensation for 2009 = $ 42.5 million
$29000/42500000 = 0.68%
Must be nice to only get a 0.68% pay cut while everyone else gets a minimum pay cut of 2.5%. Salary is 99% approximately of my compensation and for Mark Hurd Salary is only 3.4% of his compensation.
It is also nice to know that the profit he makes from our paycuts will go into his pocket and will probably easily cover the 0.68% salary cut he takes.
I would love to see a law that forbids the payout of bonuses to top guys under 2 conditions. First if the make they employees take a pay cut. second if you lay off more than 3 % of your staff in a given year.
Personally I feel why should they get a bonus if they have to ask the employees to take %10 cut. They did some thing wrong so why are they getting a reward .
So what do I do? For other companies I've worked for, if they had asked us all to take a wage cut to get through a lean period I'd have done so. We had "esprit de corps" , we had mutual loyalty and respect , we had managers that understood that saying thank you occasionally went a long way for a happy workforce. I know that all sounds like whining but the little things mean a lot.
Not with this lot though. Despite hitting all the targets I've been asked to hit, despite delivering every work product ahead of schedule, under budget and fault-free despite having to deal with clients who change their requirements every 10 minutes and want everything yesterday, I've not seen a pay rise in 3 years or even a whiff of a bonus. I can't even get them to agree to any training. So no I don't plan on agreeing to a pay cut. If they had treated me well in the good years then I'd have gone for it. They didn't see fit to share that success with me. And judging by their past behaviour I doubt my agreeing to their pay cuts will stop them getting rid of me.
Mine's the EDS jacket with the "kick me" sign pinned on the back.
The Eagles - say it all, in the lyrics of their song “Business as usual".
To sum it up, they will never learn, never stop and never get enough. "The Rich will keep getting richer, as the poor keep getting poorer".
At the rate we're going, we will change NOTHING! We will continue to fear for our existence, year, after year, after year...
Myself, I'm no longer afraid of losing the job I still have. I'm simply PISSED and willing to join in on any and every strike and warning strike the unions will organize. If I lose, I lost fighting if I don’t fight, I've already lost... Enough is enough!!!!!
@Do the Math… one thing was forgotten in the equations - our TOP management was kind enough to DOUBLE their salaries shortly before all of this began… “some never win, some never lose…”
Pardon the numerous quotes but it’s all been said before.. "over and over again…" it’s time for ACTION!!! NOW!!!
-jhw-
When asked by my American company if I would take a 5% pay cut "for the team" I said I would love too, however I am in the process of renewing my mortgage which requires me to have an income of three times my total mortgage amount, this 5% pay cut would take me under this threshold and therefore I would lose my house. So sorry, while I really want to be part of the “team” I cant lose my house.
Worked a treat.
Can you remember as far back as the days of Dick Brown? People who worked for EDS actually received pay rises - some were even paid bonuses. Then he left - taking with him our bonuses and pay rises.
I can't think of many people outside the Exec level who now receive Salary Reviews each year in line with their contractual rights - they just get told that it doesn't matter how hard you work you're not getting any more. It's all needed for Exec's rises and bonuses.
If you are lucky enough to be given a pay rise it's never the equivalent of the increase in the Cost Of Living since the last one, so still technically a pay cut, now they actually want the staff to take a pay cut.
The big problem is, those who would like to say no daren't because they're afraid they will be singled out for redundancy. It's one thing saying they won't, but . . .
It's also hard to sell when the CEO says he'll take a 20% cut, but then it's less than 1% of his total package whereas the workers who accept a 2.5% cut will lose 2.5% of their total salary, because they are never paid a bonus.
Finally let's face it, it is EDS that is propping up HP. The loss HP would have made should result in HP "restructuring", not EDS staff being asked to take a pay cut to prevent that happening.
They certainly know how to make friends and influence people.
"the computer giant’s EMEA employees are required by law to give their individual written consent before any salary deduction can be imposed upon them."
This is not true in the UK. It all depends on what clauses are written into a contract.
If there is a lay-off or short time working clause in the contract, if the clause states the employer can lay the employee off without notice and without pay then they can do it.
This has happened to myself recently and I saw a solicitor to checkout the legality of what my employer was doing. They can do it, legally.
If there is no lay-off or short time working clause then they can't do it, unless it has been established by clear evidence that either a) the employer has routine done it in the past, or b)it's a national practise adopted by the industry.
It's not something i would expect in an contract of employment for a professional, I would suspect it is more something which is applied to the trades industries: construction for example.
Folks, read your contracts of employments extremely carefully.
It's normal for us to receive small bonuses each year at Chistmas. Our company year end is December so in December the management know how much profit the company has made for the year.
We were warned about the effects of the recession in the lead up to Christmas, in February the company starts laying people off and making redundancies: we're a very small company.
We have discovered that in secret, the management team awarded themselves bonuses! But only to themselves.
This is what is wrong with this country, the contempt the management show for the workers, the company they knew is going down the tubes, they're laying off staff and awarding only themselves bonuses.
In Ireland all of the call centre staff (for companies like Bank of Ireland, Siemens, Pfizer etc.) have been employed by company called CPL.
They pay €20,000 while the industry standard is €26,000. They will employ anyone, the basic tech test is amazingly easy yet when team leads are consulting coaches about new hires they would say things like "look this person scored 50%"!!! So anyone with any talent picks up all the work for the retards while getting asked to do free overtime.
Both HP and CPL treat their employees like shit. Staff turnover is 50%+ within 6 months, the pay reviewxs you are promised every 6 months never happen and anyway the maximum award EVER was €500 so well below inflation. So while they punish you for long service by actually paying you less per year (taking inflation into account) they now want us to take another 10% reduction????
Good luck with that! Out of my whole team (90+) I havent heard of anyone that is going to take the voluntary reduction and if they make us redundant we'll take the rendundancy money and get a real job.
This stuff would be fine but:
(a) Mr.Hurd is taking less than 1% cut. So he is less liable for the tough times and reduced performance, right? It's our fault, that's the message?
(b) He earns 42M last year. So he contributed 420 times more than a hard-working middle manager, right? That's 420 times in case you missed it.
The western democratic capitalist system has been steadily moving towards absHurdity in the past 20 years. Senior celebrity staff remuneration has ballooned expontentially relative to professional staff who deliver the value. This is a shame as it is the best system in the world and to see greed dismantling it gives me a great sense of sorrow. All the great republics fell eventually. Mr. Hurd guzzling voraciously at the trough is an image that is no more disgusting than the reality. Shame on you. The people should start considering what a democracy and fair society really means, and how far we're sliding into the mire.....
Ok, HP have done this before, promised, take a pay cut and jobs are safe, a few weeks later , jobs are going. All i can say is enough is enough, and look at the strawbs.. Should give you a hint. Only one way forward in the UK. Sadly not enough people in the Uk, know that HP and EDS( all in the same boat now ) have a union. use it or loose it.. enough said. Why should the Uk take a paycut, when europe can't due to better rules, and the top brass, only take a cut on basic pay and not bonus, shares etc.
Being a UK employee, they have to "offer" me the cut... When I am "offered" the cut, I am intending to say I will accept if, and only if:-
1) It is a temporary arrangement, with a confirmed end-date, no more than 18 months away;
2) It will have no impact on any potential redundancy pay outs;
3) It will have no impact on company pension contributions;
4) This is put in writing;
5) Bonus payments are stopped until the pay cut period is finished (i.e. Mr Hurd and his evil cronies suffer the same as the rest of us);
Otherwise, they can spin on it!
Good luck to all of you there. I've got friends who do work there, and most people seem to be of the same attitude of "screw accepting this".
There's a few things I think HP could have done a lot better:
1) Total bonus freeze. Including the senior levels, if you're asking staff to take pay cuts, then there's just not enough money to pay your CEO $42m. Give him his basic.
2) Announce that it's temporary, and give very clear gates as to what conditions need to be met for the salaries to return to normal (revenue, margin, whatever). Publish a review of those figures every 6 months to the staff.
3) Don't bother with the x% at each level, make it one percentage across the board and reduce working time in level with that. If they want to get people to take 10% less pay for 6 months, they should expect to get 10% less time from those people for 6 months.
If they'd gone with those, I reckon they'd have had a lot of people seriously consider it at least.
For anyone who isn't already part of the union, get on the Unite website.
If you are CEO and want to increase profit so that you can eat up some of the competitors what do you do:
Sell any expendable assets (land, office space etc)
Apply internal cost cutting measures
Reduce staff benefits
Reduce staff pay
Reduce staff numbers
Eat competitor and get big bonus
However you would not tell your staff that you are doing all the above at the same time as everyone would walk out. You sow seeds of doom and gloom to gradually break it on your staff. I have access to information that leads me to believe they are already planning more benefit & internal cost reductions, more site/office space closures and work force reduction wheels are in motion. What we are seeing is the tip of the iceberg (mark my words!)
Listen again to the management communications, they are very carefully worded. If enough people accept a reduction in pay and market conditions remain the same we will not need to make any company wide WFR's.
Read that again....
IF market conditions stay the same?....Of course they are not, everyone is saying it's going to get worse for the next 12 months or so...
IF enough people take the reduction in pay....whoops 100% of staff didn't accept, therefore we need a WFR program?!
My advice, don't feel selfish by not accepting the pay reduction. It's a corporate game of playing on the conscience of good people to increase profits (which by the way was $1,000,000,000 NET last year!) Who needs to make that kind of profit?! Plus the manager that will be "discussing it" with you will most likely not have accepted it either!
You shouldn't knock Darth Hurd people. He's an intelligent man and clearly has a plan here:
Step One - award everyone but himself a paycut.
Step Two - make the ba5tards redundant anyway.
The hardware marketplace is going to be in the doldrums for the next 2-3 years in all probability (Dell are already making people redundant as a result), so Darth you KNOW you are going to get a double whammy here of a payroll reduction AND reduced headcount, so don't be shy, step forward and accept the employees ASSHOLE OF THE YEAR award.
Everybody take a pay cut so that I can make a stupid amount of money on my bonus. It wouldn't be so bad if he was honest and said, right, tough times, will only take my piddly little base pay.
I find this absolutely ridiculous, they say that if you take the pay cut, then there won't be redundancies. We aren't american, so we aren't that stupid. The redundancies are going to happen, and the poor buggars left behind are going to be working a lot harder..
My questions are this, when in the good times have they ever come and said, well you guys on the coal face have done such a brilliant job, here is a bonus. Companies are always wanting to cut costs where ever they can, and well, this deal wouldn't be so bad, if they said, take a 10 per cent pay cut now, and when things get better, will double it and give you a 20% pay rise. Ain't going to happen.
Why doesnt he just come out and admit it? All he wants it to say "No redundancies if you take a pay-cut" but then 3 months later when the next "Stats" come out revoke this policy and make people redundant and the package be set at those lower rates of pay.
In his own mind i bet he didnt think people would catch-on but guess what Hurd we see right through you.
Lets not forget people that his "pay-cut" is $300,000 of an annual $42million total package. Would you be bothered about that if you were him, No, because he will still have enough money buy anything he wants, its $42MILLION, but i am seriously worried about my pay-cut because that goes along way to paying the bills and putting food in my childrens mouths.
Mark ’s Hurdled another bone for us to chew on… meanwhile, the frame of the “Big Picture” is getting its final polish…
Very similar to the way the Native Americans were brought to their knees by the keen, tactical thinkers of those times... Keep ’em busy with alcohol and disease. They’ll never know what hit ’em.
Take your time, talk it out… he’ll surely appreciate and reward your patience… while the stones of progress are being laid for the same services in countries where the poor suckers are much easier to use and abuse.
“Business As Usual” a song so true, made in the REAL heart of America: by the Eagles.
-jhw-
During 22 years in the industry, I have always felt that I've been in a good bargaining position. I have technical skills that are, whilst not exactly rare, not exactly commonplace either. I have a good appreciation of business costs, and have saved previous companies I have worked for an absolute fortune (I could, annually, justify my salary 2-3 times over with hard irrefutable evidence, which has earned me several reasonable (for a techie - i.e. approx 10%) annual bonuses).
I then came to work for EDS (now "EDS, an HP company")... No bonuses, despite fantastic reviews. One salary increase, which I had to fight for, and which only just matched inflation - and that was very hard-won. No recognition for anything - we are pigeon-holed into tiny little areas of skill (mostly documentation skills) - there is no room for creative thinking, either technically, or even from a cost-saving point of view.
So - you're now asking "why did you come to EDS, an HP company, if it is so bad?, and why don't you just leave?"
The answer to the first question is: "it was a mistake" - I thought that a billion-dollar multinational *must* operate differently to the way it does...
The answer to the second question is: "at the moment, they pay the mortgage and feed the children". I don't know how long this second element will continue... All I know is that in the two years of working for "EDS, an HP company" I have not been offered one single reason to show any loyalty...
The company treats us as nameless "resources" - SAP decides everything - a guy I know, who was gainfully employed on a project, was given a compulsory redundancy notice in the last round - with marching orders for the 31st Jan, because (in SAP) he wasn't assigned to any project. He was only reprieved on the 29th Jan, after many frantic phone calls and much heartache.
I am *not* accepting the pay cut - a contract is a two-way thing. The continual lack of cost-of-living increases has been an effective pay-cut that has already been meted out. Smaller companies, with real humans running the show, and the genuine interests of the employees at heart may have had a different response, but this bunch of corporate swindlers can take a hike.
Back to the subject line - I never thought I would join a union - but today I joined Unite... When my line manager wants to "discuss" why I have not consented to the pay cut, I want as much help as I can muster...
One other thought: If the company fired the mindless lackeys (Joe Eazor, Ann Livermore, Steve Gill, Sean Finnan, Bill Thomas to name some of the "bigwigs", not to mention the many account-level lackeys) who's only role seems to be to cut/paste the garbage that Hurd sends out with their own name at bottom - how much money would it save? Their salaries, plus $42M in Hurd bonuses would go *very* long way to reducing costs.
An example of the tactless crap that we have to put up with - from Ann Livermore (a day after we found out that they were "offering" us all the pay cut):-
"We have the portfolio, we have the people, and we have the competitive advantage. The time is NOW for us to attack. I need your help to deliver a Q2 that we will all be proud of.
Best Regards, Ann"
The words "off", "moron" and "feck" immediately sprang to mind. I'll leave it to the reader to put them together to recreate the sentiment.
Multiply this by several other tactless, unoriginal e-mails from people that have *nothing* to add (other than to increase their "legend in their own lunchtime" publicity within the rapidly dwindling company) , and you get the picture.
We have this scenario repeated each time there's bad news. One message from the head honcho, who despised as he is, at least has some weight behind his words - even if it takes him three paragraphs of crap to get to... followed by a few hours where you can imagine the lackeys running around like headless chickens, wondering what they should do... then they think of their BRILLIANT plan "What if I *repeat* the original communication, but put *my* name on the bottom - all the idiot employees will think that *I'm* really clever, worthwhile and have real decision making powers?"
Then repeat for account-level lackeys... It usually results in about 8 emails on the same subject with no new content.
At least Ms Livermore didn't include the nauseating grinning photo this time, as the rusty and poisoned knife came twisting in - a small mercy.
It is a staging block move to lower future redundancy costs by cutting pay and therefore benefits now.
By doing this there is some benefit to the corporation now and then a large benefit later when further headcount reductions are made.
I'm from the inside. I knew this was coming as it was being discussed. And when I was told that in the last round of VR, not only would the corporation give me a letter I was compulsory not just VR so my insurance policies paid out....I took the VR and legged it before that could be touched next time around.
Run away now (and that is also what is being hoped for by this move) or put up with it and wait your turn. you shouldn't have to wait long. Sometime between now and the end of Q2 I would expect. With a dead cert for a mass cull prior to the end of Q3
This is just the latest trick in an ongoing hp strategy to diminish costs (employee benefits/salary) in every which way possible. Company car scheme gone, pay grades lowered across the board without notice, constant bonus target reinvention after the old one actually has to pay out, performance awards cancelled, no pay rise in 5+ years in many cases, constant risk of redundancy due to the latest "flavour of the quarter" workforce reduction initiative...the list goes on. This in a climate of consistently increasing growth & profit for the company. The worst part is, these cuts are usually sold to us as being revenue-neutral to the company, or imposed due to governmental legislation changes, rather than just being honest & admitting they really just want to save a few quid.
This latest brainfart, from whichever backroom jobsworth got a pat on the back for thinking it up, is simply a cynical way to lower the cost base in order for hp to reap the benefits further down the line. Hey, I know, let's take advantage of the current economic climate where everyone expects bad things to happen & appeal to employees' sense of decency...let's guilt-trip them into giving us LOWER COSTS FOREVER! And if they don't...well, your mate John in software might not be able to feed his kids next month coz, you know, his business unit didn't deliver double-digit growth last quarter. If this really was about savings jobs in the short term, how about making a commitment to raise salaries back to current levels given a recovery in the market? Or how about offering a couple of days extra holiday for people losing 5% of their salary...which by the way equates in many cases to a MUCH higher percentage loss in disposable income for the average Joe.
I, along with every single colleague with whom I've discussed this issue, will be flipping the bird to this "offer" when the time comes. If I really believed it was about jobs, then I'd agree in a flash, but I'm sorry hp, you've done quite some sowing of discontent in recent years, and it's time to REAP BABY !! Have to say though, I await with great anticipation what "just say yes" tactics hp employ to get us to sign this thing.
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