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 user 2009-06-05 at 3:18:48 pm Views: 30
  • #22333
    Effects of HP’s restructuring, job cuts on SA uncertain
    operations in SA are without a local head after the sudden resignation
    of country manager Oliver Fortuin last month, after just seven months
    in the job. A search for a replacement is under way.Nor does the local
    subsidiary have an official spokesman to disclose any specific
    information regarding the local effect of the cutbacks.Yesterday HP
    released a proposed restructuring plan for its Europe, Middle East and
    Africa region as part of an “ongoing global business transformation”.
    The 5700 jobs to be lost in that region will reduce its 80000 employees
    by more than 7%.

    In March, HP’s vice-president for the region,
    Francesco Serafini, said Africa was a potentially huge market for HP
    since it presented a vast target market for its products.However, any
    potential expansion plans now seem to have been overtaken by additional
    cutbacks. A more detailed breakdown of the positions to be lost in each
    country will be finalised in the coming weeks.Many of the cuts will
    come in Germany and Scotland, as HP will relocate its production
    facilities from there to the Czech Republic to reduce its running
    costs.Last week HP’s chief financial officer, Cathie Lesjak, said the
    company expected to make a 2% cut in its headcount over the next 12

    That made yesterday’s news worse than its employees had
    anticipated, but the news has been getting progressively worse for
    several months. In February, HP workers received a memo from CEO Mark
    Hurd saying he was imposing wide-ranging pay cuts in an effort to
    prevent further job losses. That followed a first quarter earnings
    report showing a 13% drop in profit and a double-digit slide in the
    sales of its printers, servers and PCs.Hurd told employees there would
    not be any major workforce reductions for the foreseeable future,
    although there were pockets where restructuring was needed in a
    “workforce optimisation process”.

    Executive council members had
    their pay cut 15%, other executives 10%, and other staff took cuts of
    5% or 2,5%. While this was implemented in the US, wage cuts in Europe
    were initially limited to leaders, who were asked to support the
    measure.“In an environment like this, there’s no margin for error and
    no tolerance for inaction,” Hurd said.“My goal is to keep the muscle of
    this organisation intact but we do have to do something because the
    numbers just don’t add up.”In September last year Hurd had announced
    24700 job cuts.