news Global technology giant HP has refused to say whether or not the 25,000 to 30,000 job cuts it is making globally will have an impact on the company’s extensive Australian workforce, although speculation flying around Australia’s IT industry this afternoon and the company’s past history suggests Australia will not be spared.
Overnight the company revealed it planned to cut between 25,000 and 30,000 jobs — representing about 10 percent of its global workforce, as part of its gradual restructure, which is seeing it separate into two corporate entities — one focused on enterprise products and services, and one on consumer products.
A spokesperson for HP Australia this afternoon issued a terse statement noting that “as a matter of company policy”, the company does not break out employee headcount by country.
However, Delimiter has received unconfirmed information to the effect that restructuring is indeed occurring within HP’s Australian operations.
Historically, the company’s global layoffs have had a sharp impact on HP’s operation Down Under, due especially to the company’s acquisition of IT services giant EDS in 2008. EDS had a significant operation in Australia courtesy of major IT outsourcing deals with Federal and State Governments, as well as in other sectors.
For example, the company’s 27,000-strong global layoff effort announced in May 2012 was expected to hit the company’s Australian operations at that point, with HP confirming at that point that the cuts would affect “just about every business and region”. Shortly after, it was revealed the company would be offshoring jobs to Malaysia.
The time before that that HP announced a significant restructure of this magnitude, the issue hit Australia hard. In November 2008, following the acquisition of EDS,HP announced that it expected to cut some 24,600 jobs globally — or 7.5 percent of its workforce.
Those cuts saw significant chops hit Australia, with HP stating at the time that it had expected to cut a similar percentage — about 450 workers — in Australia.
At the time, HP came under strong criticism from some aspects of the technology sector over what many saw as a lack of communication which the company had had with affected workers. Although the company does have union involvement in its operations in Australia courtesy of the Association of Professional Engineers, Scientists and Managers Australia, many HP staff at the time were frustrated with the company at the time over what they saw as unfair restrictions which the company had placed on managers being able to communicate with employees about their future.
The issues ultimately boiled over at the major EDS facility in Burwood and resulted in an attempted suicide by one EDS worker.
HP also offshored Australian jobs back in 2006 to Malaysia, with the company saying at the time that most customers would accept the change, as long as service levels remained consistent.
opinion/analysis
When I look back at the past decade, I have to say that it has been a decade of constant redundancy rounds from HP in Australia. 2006, 2008, 2012 and now potentially 2015 … this is a company which appears to have constantly been restructuring and chopping staff, all down the line.
I can completely understand HP’s business rationale for the ongoing cuts. Like other major players such as IBM, HP’s Australian operations are often forced to bear the brunt of decisions made by the company globally. These sorts of companies have been in operation for many decades now, and have to struggle constantly to change and adapt to the dynamic streams of technological change. Restructuring is a necessary part of this game.
However, I must also say that this sort of instability does have an impact on the company’s staff. I have spoken to many people over the years who have worked for HP in service delivery or product roles, and I rarely hear that it’s been a fantastic, long-term career experience. More typically it ends up being the case that people start in the IT industry somewhere like HP, and then eventually find other roles in organisations that may be a bit more agile.
I can’t say for sure right now whether HP is cutting jobs in Australia. But speculation does exist behind the scenes, and it would fit the trend. If you can let me know any further information, please use Delimiter’s anonymous tips form.
Image credit: Don DeBold, Creative Commons
HP is always cutting jobs! Its the HP way.
But yes a few months back they had a cull of FTE in my area. Another one will be coming.
HP have also lost service contracts
Yeah HP has been culling for the past 2 months on several local accounts. Funny thing is the clients are screwing HP down internally on contract value but they want the same service levels. That’s never going to fly, so HP send the work where it’s cheaper to have it performed, but with that cost cutting also comes skill cutting. As someone who worked extensively with the “Best Shore” engineers in India and Malaysia, we spent unbillable time performing rectification actions due to “Best Shore” common mistakes which impacted clients majorly. They don’t have the skills offshore to handle the work so clients will see a MARKED decrease in service, but hey, you only want to pay peanuts? You get the monkeys and the fleas they come with. And you’re sending even more money off shore helping the economy tank even more. Well played. Muppets.
Its the cycle HP has been in for decades. As a long time HP person (who has come and gone a few times over the last decade). I’ve seen it many times. HP ships staff overseas as its ‘cheaper’. Clients then demand a cheaper contract as the labour is now done in a cheaper country. Next renewal, HP gets screwed down on price. So the cycle repeats, they move more overseas for cost savings.
Heck when HP shipped its wintel team overseas to KL, one of the things for customers to go along with this move smoothly was they promised a reduction in contract pricing!
The problem is, these overseas staff are not as good, they have skill gaps and other issues. You have to hire more of them, so is it really cheaper in the long run?
Poor Best Shore staff puts pressure back onto the few remaining local staff to mop up the mess.
HP has renamed outsourcing to “Best Shore” aka the cheapest place we can do the workload.
> The problem is, these overseas staff are not as good, they have skill gaps and other issues. You have to hire more of them, so is it really cheaper in the long run?
This happens because promotions happen quickly and performance is stricter therefore the quality of your wintel/backup/storage and network team goes down
Very rarely you find a good offshore team member thats valuable
I find that companies like HP is trying to get out of onsite and account based services
They rather rely on partners to work with them to buy products from them and then provide revenue based support. YOu need a server you buy HP server and external MSP supports it
When something breaks. You have a support contract
If you dont… prepare to pay
Thats how HP makes money now
HP were always expensive and slower at getting any work done where I work. So the outsourcing to HP has moved back to in-sourcing finally. HP have too many managers all adding to the cost of doing any work, we had as many as 4 or 5 HP managers to stand up one server. Making use of cloud services has helped tremendously, we now standup a server in minutes rather than waiting 6 months for one server to be configured and deployed. HP has lost a lot of relevance since companies are starting to take up cloud services. This has provided a concentration of these skills in big data centres run by cloud providers. One good outcome is companies are demanding local data centres to provide better latency and in a lot of instances to satisfy legal/statutory requirements that it must be run in a specific jurisdiction/country. This means a number of jobs need to stay local. On premise clouds are also taking off, we are moving to our second internal cloud soon.
I am a developer, and we are facing the same issue of outsourcing, all while the government does nothing but say great job, we are becoming more efficient, its quite laughable really. Our government should be providing some level of protection for local jobs in IT. Put a tax on moving jobs offshore, although it is probably too late now. I think Australian IT has been dead for a while now, all thanks to the great outsource model of all businesses. There is no incentive to learn IT when our government does nothing to provide jobs. Business has argued for a long time that there are no local skills, so they import the skills. In reality, the employers are advertising wages that are fit for the third world so of course no-one local will take the job, you can’t even pay rent on their wages. This is why we have so many overloaded rental properties, with as many as 20 or more people in one rental. No idea how people live in those conditions but they may be accustom to it back in their country.
Very sad state of affairs for Australia really, and it will take at least 2 generations to get back the lost skills. I advise everyone that loses their IT job to go on the dole or get a labourer job. They get paid better than IT now and you don’t get all the stress. I like Tassie, so I may move down their and take a number on the dole queue, may as well be in nice quiet surrounds and some parts of Tassie actually have decent Labour NBN speeds :)
http://m.theage.com.au/business/the-economy/where-the-new-jobs-are-and-where-theyre-not-20150917-gjovw9.html
Some numbers to help show how stuffed IT and sciences are in Australia. Good luck to Turnbull I sincerely hope he does try to fix what the liberal party and successive governments have done.
HP have just started their Q4 rounds of WFRs. In a building near mine they handed out the letters to a number of shift workers last friday due to the work being relocated to another capital city which is earmarked as one of their RDCs.Staff are expecting most of the letters to be handed out on the coming Monday (Sept 21st) as the final WFR round before the split.
HPE in Australia last week (Mar 21st Mon) handed out WFR letters to employees at Adelaide, Sydney and Melbourne offices.
NewZeland staff based in Auckland and Wellington also impacted in large numbers. Most of those posititions now expected to be covered from Manila. Staff who have supported Commonwealth Bank, ATO etc are highly impacted in this round which also expected to continue until end of this year.
The problem with Best-shore is that very often they will close tickets on issues that they can’t solve within a certain time frame – frustrating customers who then have to struggle to keep their unsolved tickets open. To their higher-ups, it looks like best shore is doing a good job with their ability to close tickets, but to customers, it feels like they’re being flushed down the toilet – to the point where they can’t even be bothered filling out customer satisfaction surveys.
People who actually try to do quality work typically fail to close tickets fast enough, and hence get pushed out the door first in the next wave of redundancies.
The end result? Toxic work culture.
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