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HP Australia to axe 180 jobs
IT giant Hewlett-Packard is set to cull more than 180 jobs in Australia as its ambitious $US1 billion ($963m) global transformation program hits the skids.The move will impact contract workers attached to the program, which has up to 1000 contract staff globally.It is understood that a critical factor affecting the project was its $US30 million-per-month burn rate on contract labour.
The multi-year transformation plan comprises several projects, including data centre consolidation, and is aimed at standardising service offerings and automating internal processes to ultimately reduce costs and allow HP to better compete against its rivals.Once completed it is expected to deliver annualised gross savings of around $US1bn and net savings after reinvestment between $US500 million and $US700m, HP said in June.
The catchcry was "spend a billion to save a billion to grow by a billion".
Sources told The Australian that 70 per cent of people affected will be from Melbourne with the remainder from Sydney.HP began informing local staff of the cuts this week.
A diverse group of workers will be affected including project managers, analysts and various subject matter experts, they said.Workers are upset with the timing of the cuts as the job-hunting season slows to a crawl in January.HP had to slash jobs as funding for the transformation program was running out a money, a situation sources say was known months ago.Sources said funding was now the responsibility of each geography, which meant Asia-Pacific/Japan will cherry-pick which project stays, provided they can stump up capital.In announcing the cuts yesterday, HP told workers: "Over the Christmas break, shut down activities have accelerated and global has advised us that we need to action shutdown activities for affected (transformation) programs.
"This is because no funding has yet been secured from global or the regions.
"We also communicated all other transformation programs would either move to regional funding or stop. Effective immediately all other programs will be shut down."
Sources said HP had known months earlier the program was running out of money.
Data centre consolidation and a handful of other projects have survived the cuts. HP is building a $100m-plus state-of-the-art data facility in Eastern Creek, NSW.
A HP spokeswoman didn’t comment on the number of eliminated roles but said workforce changes were part of "normal business practice".
"It is part of normal business practice to review and align resources in line with business priorities," she said.
"As part of the transformation program, we announced the HP next-generation data centre in Sydney in February 2011.
"Construction was completed the end of 2011 and will be followed by a period of systems migration and testing to ensure the best levels of service for our clients," the spokeswoman said.
Some customers could be impacted by the workforce reduction, sources said.
HP Enterprise Services global senior vice president and general manager Tom Iannotti had previously said new services and processes derived from the transformation program "will enable our clients to benefit from the combined technology and services leadership that only HP offers".
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