HP/EDS Australia expect to cut 450

Hewlett-Packard and EDS expected to cut about 7.5 per cent, [approximately 450 workers], out of their combined Australian workforce over the next three years, a spokesperson for EDS' local division said today.

Hewlett-Packard and EDS expected to cut about 7.5 per cent, [approximately 450 workers], out of their combined Australian workforce over the next three years, a spokesperson for EDS' local division said today.

EDS also today confirmed the pair yesterday notified unions and government welfare agencies of a further imminent round of cuts amongst Australian workers as part of their global integration program.

"On Nov. 11, 2008, we submitted information about further workforce reductions across Australia and New Zealand," the spokesperson said in an email to ZDNet.com.au.

Neither HP nor EDS has previously disclosed what the impact of their US$13.9 billion marriage on their Australian workforce would be, although in September the pair said globally they would reduce their combined workforce of 24,600 by 7.5 per cent.

"The impact in Australia and New Zealand is expected to be in line with the announcement," EDS said today. Locally, the two have sustained a combined workforce of around 6,000 staff, with a 7.5 per cent hit meaning, according to ZDNet.com.au calculations, approximately 450 jobs would be at risk.

However they added the total impact of the integration would be determined "relative to operational requirements" and would be based on an assessment of the pair's service delivery and growth position.

"In Australia, operational integration is still in progress and there is a possibility that further areas of overlap or organisational realignment may impact our employees," the spokesperson said.

The imminent cuts are in addition to 75 redundancies EDS Australia had made last month and are part of the integration program.

The spokesperson said EDS would provide affected employees with severance packages, counseling and job placement services. "We will continue to resource for growth and wherever possible will redeploy and reskill the affected individuals to meet our growth requirements," they said.

Cuts to come as demand drops

The planned cuts could come at a tough time for those working in the Australian IT industry, as IT services companies increasingly scale back operations as customers stop spending.

While IT recruitment firm Hudson today claimed in its November IT&T recruitment report that 42 per cent of IT employers continued to face skills shortages, local IT services firms have already committed to slowing down hiring in 2009.

John Grant, managing director of local IT services firm Data#3 today painted a gloomy picture for investors at its annual general meeting, citing a fall in demand in recruitment services, particularly in NSW.

"We have trimmed the size of our team accordingly," Grant told investors.

He also said the company had made additional cuts in response to customers deferring desktop, server and printer refreshes. Deferred projects have also affected its professional services division, he said, echoing similar concerns to competitor UXC, which admitted it had laid off 12 staff.

Neil Wilson, CEO of local IT services firm, Oakton, has said the company would adopt a "just in time" approach to hiring in the coming year, while Tom Stianos, CEO of local IT services company SMS Management and Technology has said that it would be "recruiting people as we need them rather than doing so in advance."

Click here for ZDNet.com.au's complete list of layoffs in the Australian ICT industry.