HP Enterprise Services - Employee Salary Cut Controversies

Employee Salary Cut Controversies

• In March 2009, some EDS employees, based in the USA and Puerto Rico, were informed that their salaries would be cut 10% during the April 2009 pay periods, albeit with no reduction to drop a salary below $40,000 a year. This cut is in addition to a 5% cut announced in February and was limited to EDS employees, rather than all of HP. The announcement indicated pay would be restored to the February pay-cut levels (10% for management, 5% for salary employees, 2.5% for hourly workers) in May 2009.
• In July 2009, it was announced that HP would be making further "salary adjustments" to their acquired EDS staff, to bring EDS salaries in line with HP salaries. In almost all cases, affected employees were informed that their salaries would be reduced, sometimes 30% or more, within the next 1–2 years. These adjustments would be permanent in nature. HP confirmed the cuts, indicating that 20% of the workforce would be affected.
• On August 13, 2009, the Dallas NBC affiliate reported that EDS employees were being warned not to talk to the media about the salary cuts. These statements, made by Andy Mattes, the senior vice president of EDS Americas, were quoted from a podcast of the town hall and broadcast in the news report. "People have been leaking stuff into the news," Mattes said. "I can only urge you to keep the conversation that we're having here amongst ourselves. The more we can keep it amongst ourselves, the more open we can talk. If we have to get the feeling that everything that we do will show up in the newspapers tomorrow, you'll get whitewashed statements." HP spokesmen confirmed that some jobs would be relocated to other offices in Texas.
• In November 2010, the new HP CEO, Leo Apotheker, announced that HP was giving back the pay cuts that former CEO Mark Hurd put in place the previous year, returning the 401-(k) to a fixed match, and was increasing funding for employee awards and raises. The "give-back" was strictly on the initial 5% taken, not on any of the additional cuts.