The Top IT Giant HP (Hewlett Packard) has decided to go for a massive lay off and Pay Cut. It plans to cut 25,000 jobs, seeking to realize savings from its recent acquisition of EDS, the company said on Monday. Is this the time for the IT industry to declare tough times? Already the financial sectors have send jitters to the IT industry, because the BFSI sector is considered to be the top contributor for the IT industry.
Almost 50% of these jobs i.e. around 9,000 jobs will be cut in the recently acquired EDS headquarters in Palo Alto, California, USA.
HP estimated $1.8 billion in annual cost savings once the three-year cost-cutting program is completed. At the time the $13.2 billion merger of computer services provider EDS into HP was announced in May, Hewlett-Packard counted 178,000 employees on its books and EDS had 142,000 employees. HP mentioned that majority of the jobs that will be cut will be in terms of overlapping functions in EDS and HP like as in legal, accounting, information technology and human resources. Instead of massive lay off, it planned to cut the pay from 5% to 20%. The CEO, Mark has initiated this pay cut by cutting 20% (i.e. $2.50 L) from his pay. Now his pay will be around $14.5 lakhs.
Work-force reduction plans will vary by country, based on local legal requirements and consultation with works councils and employee representatives, HP said. The only good news for the employees is that the company will provide employees affected by this restructuring program with severance packages, counseling and job placement services.
In this quarter, HP revenue decreaced by 13% from its Profit.
