Fresh job cuts for EDS Australia

Fresh job cuts for EDS Australia

Summary: Australian EDS staff have suffered a fresh round of job cuts this week, according to sources, as local employees vote on whether to accept a 10 per cent pay cut handed down globally.


Australian EDS staff have suffered a fresh round of job cuts this week, according to sources, as local employees vote on whether to accept a 10 per cent pay cut handed down globally by new parent HP.

Morale is very low in the organisation

EDS Australia sources

Sources within EDS have told that EDS staff in the sluggish Canberra market and its NSW Burwood centre were bearing the brunt of the cuts, with a fresh round numbering around 250 set to go this week across Australia.

"Morale is very low in the organisation and the level of support that [EDS] are providing to their customers [is] declining," sources within EDS claimed.

It was unclear whether the alleged cuts were part of the company's merger plans announced last year, under which it would cut around 7 per cent or 450 staff from its 6,000-strong joint workforce over the coming three years in Australia and New Zealand.

HP spokespeople have been unable to respond to today.

The alleged cuts made recently by the company follow CEO Mark Hurd's announcement in February that HP would cut salaries of senior executives and staff in order to prevent further layoffs.

According to the Association of Professional Engineers, Scientists and Managers, Australia (APESMA), which has been in negotiations with HP over recent months, all permanent Australian staff have been asked to vote on accepting a pay cut of 10 per cent — the same level that only US managers were asked to accept.

"There is an email ballot of employees to see whether they will accept the pay cut or not, and [HP/EDS] will look at that before determining the next lot of job cuts," APESMA CEO Chris Walton told this morning.

"There is a wide and blunt axe going through the company internationally, even through the business fundamentals in Australia are quite solid," he added.


APESMA CEO: Chris Walton
(Credit: APESMA)

HP Australia's revenues rose 1.8 per cent last financial year to $3.27 billion; however, net profits fell 45 per cent to $44.3 million. It spent $513.7 million on staff. Meanwhile, HP's local executive team took home $5.35 million, up $110,000 from last year.

But while permanent staff vote on the 10 per cent pay cuts, contractors have not been given the opportunity to vote on the ballot, said Walton. "We believe contracting staff have been required to take a pay cut if they wish the contracts to be renewed," he said.

Meanwhile, Walton said that while HP/EDS' Australian executives would be taking a 20 per cent cut, though "close scrutiny would suggest that their bonuses are not being affected," he said.

If true, Mark Hurd would take a 20 per cent cut to his $1.45 million salary last year, with the US$42 billion in bonus payments and share options remaining unaffected.

Topics: Hewlett-Packard, IT Employment

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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  • start a new outsourcing co-operative

    If I were in this position, with a bunch of equally bright colleagues, I'd be having a look at my letter of employment and negotiating out any and all restraint of trade clauses - hey HP can't have everything their own way. That way when the axe falls, after being coerced into taking a 10% cut, me and my mates can go and start our own outsourcing company and bid for the contracts that EDS will lose. Just a thought :)
  • Down selection

    Considering it looks like EDS and Infosys have won a lot of the work, pushing IBM and Satyam out of the picture - be interesting to see how they manage considering that Corporate are saying cut jobs regardless whether the people are actually working on jobs that is bringing dollars into the business.
  • Unnecessary cuts

    They are now cutting highly technical people that are account critical, the clients are starting to notice the reduced service, they are targeting all areas that are non-billable as well as highly paid technical staff that they believe are replaceable quickly in the current market. Most accounts are struggling to service existing clients yet the cuts continue, with aggressive quarterly reduction targets, all this despite the fact that a number of new accounts have been one recently. Morale is at an all time low...
  • Real Mark Hurd

    Thought this ws slightly humourous
  • Corporate Greed Personified

    Mr Hurd is getting some good feedback from the people who generate the income to feed his yawning maw:
  • Cuts = no more layoffs ? Lies.

    laid off 2/28. AFter the pay cuts.

    Mark Hurd is a zero
  • Oh so glad!

    This sort of thing was on the cards 5 yrs ago - before HP looked at EDS seriously. Frankly the rot set in when o/seas outsourcing reared it's cheap and not so pretty head. (No offence intended to those who fit the bill) I am just so glad that my husband saw the writing on the wall in 2004 and decided to opt for happiness in Qld (even though the salary is less) instead of uncertainty and stress in Sydney.
    Good luck to those who still have a job.