HP churn: Boot 1 hire 1
HP churn: Boot 1 hire 1
Date: Friday, December 22, 2006 1:13 AM
<<<<< JOB DESTRUCTION NEWSLETTER No. 1612 -- 12/22/2006 >>>>>
The Mercury News published a very blunt article concerning the churning of
employees at Hewlett Packard. It's a revealing story but there is a rather
large BS factor by some of the HP executives,
What the HP spin doctors and the Mercury News doesn't report is equally
important.
HP and Microsoft have vigorously lobbied for increases in H-1B visas to
fill what they claim is a shortage of computer IT workers in the U.S. HP
has been whining for over a decade that there are shortages of skilled
workers in the U.S., and of course they use that as a justification for
their aggressive lobbying for the H-1B program.
The article explains how HP churns employees but it falls short by
de-emphasizing the hypocrisy of HP's shortage shouting. Here are just a few
examples of the propaganda that HP routinely blurts to the media:
September 2006
HP CEO Hurd participated in a Silicon Valley CEO Council with schmucks from
Microsoft and Intel. They told Congress it was "time to act" to raise the
yearly limit of H-1B visas. The purpose of the meeting was specifically to
lobby for the "Skil Bill" that contains unprecedented increases in H-1B.
June 2006
The title of their own web page says it all:
http://h71028.www7.hp.com/eNewsletter/cache/331693-0-0-0-121.html
Prepare for the looming IT skills shortage
2004
Ex-CEO Carly Fiorina signed the CompeteAmerica petition to Congress that
asked for an increase in the H-1B limit because supposedly HP couldn't find
enough Americans with college educations.
2003
Mr John McHugh, vice-president and general manager at Hewlett Packard, said
that it is very difficult to find suitable manpower in Silicon Valley
because there just aren't enough talented engineers.
So if there is such a big shortage of workers as Hurd claims why does he
admit the following in the new Mercury article?
"The company has been loaded down with too many workers
in information technology, human resources and finance
positions -- and not enough in revenue-generating jobs,
such as sales."
One look at the Labor Condition Applications that HP has filed shows that
they aren't using H-1B visas for many sales jobs (there are some) -- they
are using H-1Bs mostly for programmers and engineers. You can view the LCA
database by going to: www.h1b.info/
Massive influxes of these high-tech braceros makes it very convenient for
HP to churn their engineers and programmers. That important point was never
made in the report.
Now, back to my original assertion that the Mercury let HP get away with
some major BS. It's no secret that the Mercury supports H-1B. All summer
long they have had editorials supporting H-1B increases and in the past
their articles have been quite biased in favor of the visa. By not raising
this issue in the article the Mercury may seem ignorant, but that's not the
problem. They simply chose to ignore it.
The paper version of the article has a very good graphic on HPs manpower
numbers. Unfortunately it wasn't included in the web version. I recreated
the data below.
***** Graphic with Newspaper version *****
How is it that HP has laid off 45,000 employees since '02, but its total
head count is about the same at 150,000? Call it 'churn, or creating new
jobs while cutting old ones
Fiscal Total Total
Year Layoffs Workforce
2001 NA 149,900
2002 17,600 141,000
2003 8,400 142,000
2004 0 151,000
2005 19,750 150,000
***** End of Graphic *****
These statistics, while interesting, tell us nothing about where the jobs
went or who has them now. Mercury reporter Mike Cassidy said in his blog
that HP "won't say in what countries they're firing people and in what
countries they're hiring people."
Despite HP's refusal to divulge the demographics of their work force the
obvious conclusion after seeing these numbers is that 45,000 jobs at HP
were eliminated in the U.S. and then offshored. That conclusion may be
true, but it is very incomplete!
HP has hired thousands of H-1Bs since 1990. Not all of them are accounted
for in the LCA database because many of them are hired through contractors
such as Tata. To see just how bad it gets at HP read this classic:
http://www.jobdestruction.com/ShameH1B/Library/Legal/CAPS_vs_HP_Tata.txt
Californians for Population Stabilization (CAPS) vs. Hewlett Packard and
Tata Consultancy, 1997
<<< Summary of the Case >>>
On October 4, 1993, CAPS alleged that the bodyshop Tata had committed acts
of unfair competition by engaging in statutorily prohibited conduct and
unfair practices. The second cause of action alleged that H-P was aware of
Tata's unlawful and unfair business practices and was liable for conspiring
with Tata to violate California law. The court found CAPS had failed to
raise a triable issue of material fact as to H-P's knowledge of or
participation in the alleged unlawful practices, and denied all the charges
against Tata on technicalities. The 1997 document lists the details of the
case.
+++++++++++++++++++++++++++++++++++++++++++++++++++
Note: You can leave comments at the end of this article and Cassidy's blog.
So far many have including myself.
http://www.mercurynews.com/mld/mercurynews/16288976.htm
Posted on Thu, Dec. 21, 2006
HP churn: Boot 1, hire 1
By Nicole C. Wong
Mercury News
What's 150,000 minus 45,000? In Hewlett-Packard's world, the answer is
still roughly 150,000.
Since 2002, HP has laid off 30 percent of its employees worldwide to cut
costs and improve operations. But sending all those employees away with
pink slips or early retirement packages hasn't caused a plunge in HP's
global head count -- because the company continuously hired new workers
while it escorted others out the door.
Hiring people while laying off others is called churn. And HP isn't the
only aging Silicon Valley vanguard that's using churn to survive the
onslaught from technological innovation and global competition. But the
legendary computer company's use of churn to help fuel its financial
turnaround illustrates how the strategy has shattered the implicit
employment contract that once bound America's companies with their workers.
The technology industry titan that was started by two Stanford University
graduates in a Palo Alto garage in 1939 had averted layoffs for nearly 60
years. When times were lean, HP coped by spreading the financial hardships
among all employees and by training workers so they would possess the new
skills that the evolving market demanded.
HP's decision to embrace workforce churn puts it on the same path that many
global companies have walked in recent years. On Wall Street, HP's strategy
is seen as a smart way to adapt to the changing market demands.
``It's a natural thing to do,'' said Brent Bracelin, a financial research
analyst at Pacific Crest Securities.
Steven Cochrane, a senior economist who follows Silicon Valley's labor
market for Economy.com, said, ``This is what you would expect in a dynamic
industry or a dynamic economy. Understanding the churn is important to
understand whether the industry is truly shrinking or whether it's trying
to change shape so it's more competitive in the future.''
Churn is used commonly to mean all kinds of departures from companies,
including voluntary resignations and those fired as well as those laid off.
Looking at the intentional churn created solely by layoffs gives insight
into how much companies are controlling how their workforce changes.
`Disposable workers'
To some management experts, HP's intentional churn represents a dramatic
cultural change for one of Silicon Valley's signature companies, whose
workplace practices were once regarded as a model worldwide.
``HP was one of the holdouts of an older-style commitment firm,'' said
Diane Burton, an associate professor at MIT Sloan School of Management who
has taught a popular Harvard Business School case study on HP's pre-churn
workforce practices. ``Now they're treating their people as disposable
workers.''
Chief Executive Mark Hurd has explained the latest layoff plan as an
ambitious agenda to cut back on jobs that have been putting HP at a
competitive disadvantage. The company has been loaded down with too many
workers in information technology, human resources and finance positions --
and not enough in revenue-generating jobs, such as sales.
``We are trying to get our cost structure right,'' Hurd told HP business
partners in September 2005. ``And the places that the cost is coming out of
are not the places where we're adding cost.''
That's true not only for the types of jobs, but also for where they're
located.
The global layoffs recently helped HP chisel away at an expensive workforce
in the United States and Western Europe, and funnel work to lower-paid
employees in Asia, Eastern Europe and Latin America, according to several
HP executives in Europe.
``Some jobs are disappearing on-shore because the skills and the quality
exist elsewhere at a much cheaper cost,'' said Eric Grall, HP Services'
vice president of global delivery for Europe, the Middle East and Africa.
A spokesman from HP's headquarters in Palo Alto declined to comment on
this. But Chief Financial Officer Bob Wayman told Wall Street in March that
of the 15,300 employees being laid off through Jan. 31, 2007, ``some of
those employees will be replaced by other employees, in many cases in
different, lower-cost geographies. . . . We're moving back-office functions
to India, Costa Rica, Eastern Europe, etc.''
U.S. companies are rarely required to disclose how many employees they have
-- or have laid off -- in a particular geographic location, and HP has
declined to do so. However, HP did reveal in July 2005, when it announced
the most recent layoff plan, that its 151,000 employees worldwide included
58,000 in the United States and 9,000 in the Bay Area.
Head count fluctuates
The global head count and regional breakdowns fluctuate throughout the year
depending on whether hiring is outpacing layoffs at the time.
Hurd said HP would reduce its worldwide head count of 151,000 employees at
that time by 10 percent over the next six quarters, ending Jan. 31, 2007.
And that should save HP $2.1 billion annually beginning this fiscal year,
which started Nov. 1.
By April, HP had already laid off 8,100 of the slated 15,300 employees. But
due to non-stop hiring, the worldwide head count had dipped only 0.6
percent -- to 150,000.
HP later said eliminating positions doesn't mean the company stops hiring.
HP spokesman Ryan Donovan declined to comment on whether the company is
cutting costs by hiring cheaper workers.
However, Donovan said the company has been hiring ``nearly continuously''
throughout the years of layoffs as it worked ``diligently'' to match its
workforce's abilities with the market's changing needs.
``This means deploying people in roles that will help the business grow in
areas of promise while shifting them away from areas offering less
potential or where functions may have become redundant,'' Donovan said.
``This is why we are hiring aggressively in certain areas while working to
eliminate positions in others.''
Paul Oyer, an associate professor of economics at Stanford's Graduate
School of Business, said IBM adopted this churn strategy in the 1980s.
``They were downsizing the company dramatically, but they were always
hiring into new types of businesses,'' Oyer said. ``They closed
manufacturing units but at the same time were increasing their software and
consulting businesses.''
Experts say that over the past six years, more high-tech companies have
churned their workforces as they bowed to market pressures to produce
bigger profits amid intensifying global competition and accelerating
technological innovation. But hiring continuously amid layoffs hasn't been
limited to the fast-paced tech sector.
Although workforce churn isn't new, its prevalence has not been widely
known.
Clair Brown, co-author of a book published in October called ``Economic
Turbulence: The Impact on Workers and Businesses,'' examined workforce
churn in the semiconductor, software, financial services, retail food and
trucking sectors from 1992 to 2003. She said the amount of hiring amid
layoffs was ``staggering.''
``We saw no matter what, companies had constant employment,'' said Brown,
an economics professor at the University of California-Berkeley. ``I saw a
real sea change in these companies' willingness to take care of their
workers in the '80s and '90s.''
Compaq merger
HP was one of the last notable companies to cast aside what had amounted to
a lifetime-employment legacy. It has implemented eight layoff plans since
2002, when its mega-merger with Compaq Computer made HP's workforce of
approximately 86,200 employees swell overnight to nearly 150,000.
Under layoff plans announced that year and the next, the combined company
sent 26,000 workers away with severance packages to reduce redundant
operations and realign activities with the cooling business climate. In
2005, HP initiated layoff plans three times -- getting rid of 1,450
employees, then 3,000 more, and finally another 15,300.
HP said it would not provide details about how the churning has changed its
workforce because of competitive and confidentiality concerns.
But HP has said about half of the 15,300 latest job cuts are whittling down
back-office support. And Hurd, who started his career 26 years ago as a
field salesman at Ohio-based NCR, has repeatedly mentioned during speeches
and press conferences over the past 15 months that he wants HP to beef up
the size of its sales staff.
These kinds of workforce shifts have helped HP boost its revenue this year
by 6 percent. Its stock price is up more than 60 percent since the last
major job cut was announced July 19, 2005. The revenue growth has given HP
the title of the world's largest technology company, a claim that IBM held
until November.
While HP's future looks brighter, some employees are still dismayed about
the company's departure from its past workplace practices.
But Wally Russell, HP's director of employee relations for Europe, the
Middle East and Africa, said moving work to lower cost areas will benefit
the remaining employees in the long run.
``If we're not competitive,'' Russell said, ``we will lose more jobs than
we are losing.''
Contact Nicole C. Wong at nwong@mercurynews.com or (408) 920-5730.
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://www.mercextra.com/blogs/cassidy/2006/12/21/hewlett-packards-big-export-jobs-it-just-doesnt-want-to-say-so/
Hewlett Packards Big Export? Jobs. It Just Doesnt Want to Say So.
By Mike Cassidy
Thursday, December 21st, 2006 at 10:04 am in Uncategorized, Silicon Valley
Business.
I cant for the life of me figure out why big, rough and tough companies
dont just come out and say it: Yes, they are moving high-paying U.S.
jobs to low-wage countries so they can make more money.
Hewlett Packard is the latest to play the rope-a-dope as displayed
brilliantly in Mercury News staff writer Nicole Wongs front -page
story today. Wongs piece explains that even though HP has laid off
45,000 people since 2002 that the companys worldwide head count remains
unchanged at 150,000.
The HP arithmetic is simple: For every person they fire, they hire somebody
new. HP wont say in what countries theyre firing people and in what
countries theyre hiring people. They wont say theyre moving
high-cost jobs to low-cost economies. In fact they wont say much,
something of a proud company tradition.
But smart people say its pretty obvious that HP is shifting work to
boost corporate profits. And the rest of us are saying, Hey, we werent
born yesterday.
"HP was one fo the holdouts of an older-style commitment firm, Diane Burton
told Wong, Burton is an associate professor at MIT Sloan business school
who has studied HP. "Now theyre treating their people as disposable
workers."
Its amazing to me that HP doesnt just say so. We seem to be living in
a time when big business has no shame. (See Goldman Sachs CEO John Macks
$53.4 million bonus.) In fact, people like me, who sometimes wonder whether
companies dont have a social responsibility beyond just making gobs of
money, are ridiculed as being naive and just plain wimpy. Be a man, boy.
Some years ago, I went around and around with Cisco on a similar issue. In
fact, chief executive John Chambers while in Davos, Switzerland, made the
mistake of telling a New York Times reporter that the company planned to
eliminate expensive U.S. workers and replacing them with cheaper workers in
India and China.
When I called the Cisco public relations machine for clarification, they
backpedeled and obfuscated and argued over a few days and many phone calls.
What they didnt do is answer, exactly. I ended up writing this in early
2002:
"Every news story from Davos describes the thin mountain air at the Alpine
resort. Maybe its the light air that leaves Davos visitors a touch
disoriented.
John Chambers took time out from the gabfest to talk to the New York Times
about productivity. He turned to a pressing concern in Silicon Valley:
jobs, or the lack of them. First, Chambers said Cisco Systems future
growth depends on moving U.S. jobs to India and China.
"If youre talking about an engineering job in the U.S. or here in
Europe, vs. an engineering job in China or India, the price differential is
five or 10 to one," he told the Times. Then, he seemed to say that Cisco
had not cut the overall number of jobs in developed countries, like Europe
and the United States.
"Mr. Chambers said, though, that the number of people Cisco employs in
advanced economies had not decreased because it trains its displaced
workers for new jobs," the Times paraphrased Chambers as saying.
So, lets see. Cisco has cut 4,000 jobs worldwide just since July 2001,
according to Securities Exchange Commission filings. But none of those job
losses was in developed countries? That means the cuts were made in
developing, low-wage markets. Kind of wacky, huh?
When I asked Cisco about the comment, a spokeswoman first told me that
Cisco had in fact cut the number of jobs in advanced economies. Later, two
spokespeople called back to say, on second thought, Cisco would not say
whether it had cut the number of jobs in developed countries. Which leaves
us all to wonder what the truth is and why Cisco doesnt want to tell it
.Sure, its confusing
Me? I blame Davos."
Full disclosure: I work for a company, the San Jose Mercury News, that just
this month laid off newsroom workers for the first time in the papers
modern history. The company is also significantly reducing employee
benefits in order to ensure profits. Yes, I have an ax to grind, but Ive
been writing about this issue since long before the Mercury took its
current tack.
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://h71028.www7.hp.com/eNewsletter/cache/331693-0-0-0-121.html
June 2006
Prepare for the looming IT skills shortage
The world's demographics are changing, and experts predict this will soon
have a large impact on the market for IT professionals. Forward-thinking
companies are beginning to address the issue now, to ensure that they don't
suffer from the IT "capability gap" that appears to be just around the
corner.
Numerous factors are at work to create the worldwide skills shortage. First
of all, many of today's most experienced IT professionals are approaching
retirement age, and they soon will be leaving the full-time workforce.
Second, there are increasing demands for specialists in industries that are
heavily reliant on IT, such as healthcare, finance, and insurance. And
finally, post secondary educational trends show that fewer students are
entering into degree programs for computer science and other IT-related
fields.
In a few shorts years, we will have fewer people who are fully prepared to
meet the growing demands of our global information society.
Forrester Research has been studying this phenomenon, and has concluded
that companies "must adopt a multipronged strategy to ensure that the
requisite skills for success are available in sufficient quantities." In
his January 2005 trend report "IT Skills Shortages on the Horizon,"
Forrester analyst Craig Symons writes that the strategy should include:
Assessing current skill levels and demand. Develop competency models for
each of the critical skill positions with IT; assess the skills of the
current IT staff against these models.
Identifying gaps. Develop a forecast of demand based on the current and
planned project portfolio. Next, identify gaps between existing staff and
the demand for critical positions from these projects in the pipeline.
Developing a resource plan to close the gaps. Resources may come from a
combination of internal development, newly hired employees, and outside
contractors.
HP is working with our channel partners and enterprise customers to address
the issue of the skills gap. We recognise that the human power behind our
IT enabled business is more valuable than the computer systems themselves.
That's why we developed a worldwide program for ongoing professional
development and skills enhancement. More than 120,000 individuals are
already preparing for the future in the HP Certified Professional Program.
HP Certified Professionals are IT experts that participate in a rigorous
process to validate their skills and knowledge about HP technologies. These
individuals have demonstrated a higher level of performance, with the
knowledge and expertise that uniquely qualifies them to plan, deploy,
maintain and support multi-vendor, mission critical IT environments.
In addition, they participate in continuing education and receive regular
updates, specialised support and tools from HP that help reduce the time
and risk involved in implementing new technologies to ensure that issues
are resolved before they become problems.
Technical education and certification are not unique to HP; many of our
competitors offer such programs. HP is unique, however, in that we
collaborate with our Certified Professionals to help them develop "the
right" skills - the ones that your organisation needs to avoid a capability
gap and create a sustainable competitive advantage.
We regularly meet with partners and customers to conduct detailed "job task
analysis" studies to determine the critical skills required for specific
jobs. HP then develops educational opportunities around these skills and
builds them into our certification program. Our Continuous Learning
Initiative helps HP Certified Professionals maintain the most relevant
skills with the highest level of performance.
To learn more about the HP Certified Professional Program and how it can
help your organisation close the skills gap, please visit
http://www.hp.com/go/certification.
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