The final tally on HP's unusual layoffs: a couple hundred employees will be affected and here's what they can expect
To recap: HP told groups of workers that they would be getting new job offers from new companies that would turn them into contract workers for HP. We confirmed that the hiring companies were Ciber and Adecco.
Adecco is a contract work agency; Ciber is an HP reseller and an IT consultant. So essentially, HP gets these employees off its payroll and gets to hire them back as contractors.
These offers meant that employees would still have jobs and not be laid off. But many employees were upset because the new jobs included large pay cuts, fewer benefits, lost seniority, and a loss of their annual allotment of vacation time (such as four weeks). They would be considered new hires at their new companies.
If they refused the non-negotiable offer, they would be cut from HP with two-weeks' severance, sources told us. HP has laid off about 52,000 people since it started this layoff process in 2012. For most of them, the going rate of severance was 1 week of pay for every year of service, multiple people confirmed.
When you consider that HP employs 300,000 people, these unusual layoff circumstances don't affect much of the company.
But for the few hundred it does affect, here's what HP workers in the US and in Europe say is going on:
- The Ciber offer was given to a lot of programmers and analysts, people who were under contract by an HP customer to work on, say, an Oracle e-commerce software or to write applications for HP healthcare customers and so on.
- The Ciber offer was, so far, only for US workers. In August, people in Europe were also laid off, HP confirmed to us, but those layoffs were part of the ongoing restructuring going on since 2012. For instance, in one unit that had US, Canadian and European team members, all 35 US workers were asked to take jobs at Ciber, while none of the others were.
- The employees we've heard from say Ciber's job offer involved big pay cuts. Some people reported cuts of 30%, others said the offer was $20,000 less. For instance, people making $76,000 as programmers with over 10 years experience were offered in the $40,000 to $50,000 range, one person told us.
HP ES is HP's consulting unit. It's been experiencing declining revenue for years with profit margins of 4% - 6%. Throughout 2015, CEO Meg Whitman has vowed to stabilize it, and make it more profitable with margins of 7% to 9%.
She also said that this will be "the last restructuring for Enterprise Services," at least at the corporate level. After that, the unit will hire and release people on its own as it gains and completes contracts, she said.
When we asked HP about the layoffs in Europe, a spokesperson explained:
"This transition is a component of the plan that HP has openly discussed since May 2012, which is designed to streamline business processes, advance innovation and deliver better results for our customers, employees and shareholders."
When we asked about the Ciber and Adecco layoff/job offers, a spokesperson confirmed:
"HP reached an agreement with a strategic labor partner to allow more flexibility in managing labor demands. There are a small number of employees who will move from HP and become contractors to HP's Mobility and Workplace Services organization. HP will continue to own and manage the end-client relationship and overall service responsibility."