HP swings the axe again. More than 7,000 European staff will get the chop.

Oct 25, 2013

After the unmitigated disaster that was the brief but barking reign of Apotheker the Deluded (he of TouchPad fame; the man who wanted to transform HP into another "me too" software company in a world that already has too many of them), Meg Whitman was brought in to steady the company and yet again cut costs whilst upping spend on once-renowned R&D progranmes and activities that had fallen into neglect.

It is a hard equation to balance but Ms. Whitman's approach has been to cut and cut again. By the end of HP's 2014 financial year the company will have 30,000 less employees than it did in 2012. HP's Q3 figures showed that 22,700 personnel had been given the push under the remarkably named "Make It Better" jobs loss regime. And they say Americans don't do irony.

In that filing the company disclosed that the "total expected headcount reductions could vary as much as 15 per cent from HP's original estimates". And you can bet your sweet bippy that the variance will be upwards rather than downwards.

Now the blade will bite most deeply into HP's European theatres of operation. It is bad news but at least the company will have to abide by the terms of the much stricter employment laws that pertain on this side of the Atlantic. Here it is not simply a matter of a pink slip popped into a pigeonhole, an impersonal email, a fortnight's cheque and an escorted trip off the premises.

Employees here do retain some legal employment rights and HP will have to negotiate with the unions, works councils and comply with strict EU laws as they lay off the thousands of workers earmarked for the knackers yard.

Spinning the news at a rate that would give a Dervish vertigo, HP says it is taking actions to "help affected employees during this transition".

According to a leaked letter from HP circulated across the continent by the HP European Alliance (of workers, that is) of the latest tranche of 7,095 staff to be sacked the lion's share (some 6,000) will be culled from Enterprises Services and 340 from Customer Delivery Services.

The European Alliance questions the the rationale of where the blade will fall. In the letter it writes that HP is "refusing" to provide job cut figures on national bases and adds, "Why HP buy EDS? Just to fire all the people?" It's a fair point - the EDS acquisition and integration has been far from successful - and that's an example of typical British understatement.

HP currently spends just 2.8 per cent of sales revenues on R&D. Ericsson of Sweden spends 14.7 per cent amd Huawei of China spends 13.4 per cent. Furthermore, both of these companies are committed to spending even more. 'Nuff said.

Meanwhile, HP is about to sell-off some of its mobile patents. An unnamed HP executive told Bloomberg that it has contacted "potential interested parties" who might be interested in a slightly-used OS and other intellectual property.

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