*NEWS*HP:FIRES 14 EMPLOYEES IN ISRAEL

[Anonymous]

Export Controversy Rocks HP’s Israeli Unit
Hewlett-Packard’s European unit has reportedly reversed a decision last week to fire 14 employees, including CEO Gil Rosenfeld, following an internal company probe of the unit’s export practices.
TEL AVIV, Israel – Hewlett-Packard’s European unit has reportedly reversed a decision last week to fire 14 employees, including CEO Gil Rosenfeld, following an internal company probe of the unit’s export practices.
The firings reportedly occurred Friday (March 24) after an extensive investigation by executives in HP’s European operation, according to Israeli press reports. The probe focused on alleged “gray market” sales outside Israel, which violates company policies. However, HP Europe relented on Sunday after Rosenfeld denied the allegations and claimed he was being set up.
The dismissals were based on suspicions that the Israeli subsidiary sold products that were intended for the Israeli market to other countries at cheaper prices. The export practice violates a permit granted to the Israeli unit by HP that forbids it to sell products outside Israel.
An HP spokeswoman on Monday dismissed statements attributed to the company in the Israeli press as “speculation.”
The company added in a statement: “HP has determined that gray market activities were taking place at HP Israel and is currently conducting an extensive internal investigation. Gray market activities are not unlawful but they violate HP’s own policies and its Standards of Business Conduct. HP has made no decisions as of yet, but regardless of the outcome, HP remains fully committed to the IT market in Israel.” Rosenfeld denied the allegations and demanded HP Europe present him with its evidence. Rosenfeld said documents presented to him were not tied to gray market activities, and he was planning to petition the Tel Aviv Labor Court to obtain a temporary injunction forbidding HP from terminating his employment until the case is resolved.
Rosenfeld claimed he discovered the irregularities and approached HP Europe to launch an investigation. He further charged that HP Europe’s management “has fallen victim to distortions by interested parties seeking to mislead it,” adding, “had they accepted my offer to aid in the investigation, it would have uncovered the truth. Someone in HP Israel passed certain information to executives at HP Global. I am being set up.”
Rosenfeld was likely referring to his predecessor, Ehud Graff. Rosenfeld said he discovered irregularities at HP Israel when he took over from Graff two years ago. Rosenfeld claimed he notified HP Europe about questionable fees paid to Israeli sales agents but was ordered to take no action against employees. None of the agents who were paid were among the fired employees.

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March 30, 2006 at 11:52 AM