Australian HP-EDS staff swim in murky waters

Recently appointed local EDS head David Caspari says the 7.5 per cent staff cut goal was "by and large done" for its Australian and New Zealand operations.

Recently appointed local EDS head David Caspari says the 7.5 per cent staff cut goal was "by and large" completed for its Australian and New Zealand operations.

David Caspari

David Caspari
(Credit: EDS)

"By and large the activity related to that 7.5 per cent activity has passed for Australia and New Zealand," Caspari told yesterday.

In other words, more cost-cutting exercises are still expected at HP's EDS Australia and New Zealand operations over the coming three years but the worst, in terms of job losses, was over.

Caspari, however, would not clarify whether this meant it had already shed more than the 75 staff that were dropped by EDS in October.

"Obviously Australia and New Zealand [are] no exception because we are also looking to maximise the synergies and duplications that happens with bringing the two organisations together," he said.

Caspari said the revamped Technology Services Group, which a fortnight ago nominally annexed EDS' local operations, was in a strong position for next year due to CEOs hoping to cut operational costs.

"This plays perfectly to IT services and outsourcing," he said.

The HP-EDS integration was also ahead of schedule, he said. Since Caspari's appointment on 1 November, the executive has had a rough ride, including one staff member attempting suicide weeks after his appointment. Caspari had also recently completed a regional tour of EDS Australia and New Zealand's sites as well as its top 40 customers.

Customers' major concern was that the merger would threaten service levels, he said.

"Once they're satisfied that the level of service will continue to remain, they just want to know what other opportunities there are," he said.

While HP had repositioned EDS within its Technology Services Group (TSG) — instead of an independent unit — Caspari said it was not dominated by HP staff. "There is a good mix," he said.

Caspari declined to comment on HP-EDS' arch rival, IBM's Global Technology Services Group, but said it was building a sales team dedicated to securing application development contracts — a lucrative area in outsourcing in which IBM has a large stake.

"We're introducing a dedicated sales force for application work," he said.

EDS under TSG would also focus on mid-market customers "worth less than $10 million a year", which would put it head-to-head with smaller Australian IT services firms.

Local IT services companies such as UXC, ASG, SMS Technology and Data#3 reported strong growth in the 2007 financial year, however, many have either laid off staff or developed more cautious hiring plans for 2009. (See Australian ICT layoff scorecard).

The union between HP and EDS should not mean customers of the merged entity would face restrictions on hardware choices, said Caspari.

"EDS will always use technology that best meets our customers' needs," he added.