HP's Huge Salary Cuts Forcing Out Old EDS Employees
By RANDY MCILWAIN
Updated 1:11 PM EST, Wed, Aug 5, 2009
When Information Technology came of age, Ross Perot's EDS was among the world leaders. Ask almost anyone at the Plano based company, they'll tell you there was pride that went with employment there and that hard work was rewarded with good salaries and benefits.
In 2008, EDS was bought by corporate IT giant, Hewlett Packard, also known as hp. After the transition, EDS employees are no longer singing the same tune about where they work.
"The community needs to know what's happening to an outstanding company," said an employee who wished to remain anonymous.
That employee has worked for EDS between 12-20 years, climbing the corporate ladder but still firmly in the middle class. Last week he received an email which informed him his base salary would be reduced effective Sept. 1.
"We don't know what we're going to do. We don't know," the man told NBCDFW, as tears streamed from his eyes.
Employees were prepared for salary cuts between 2 1/2 percent to 5 percent. Last Feburary, former EDS employees had their salaries sliced by hp by 2 1/2 percent. In April, more cuts with salaries slashed another 10 percent, that 10 percent figure was restored a month later but the email received by the employee this time indicates nothing surgical in the wage cut.
"My pay is being reduced a total of 29 percent, 20 percent effected Sept. 1, the additional 9 percent effective Sept. 1, 2010," the man said.
That's nearly a 32 percent salary cut for one employee in two years time -- more than one-third of his base salary. The cuts push him back to the salary he earned working the same job in the same building more than 10 years ago.
Other former EDS employees said that under Hewlett Packard, they've experienced salary cuts of between 10 percent and 47 percent.
A spokesperson for Hewlett Packard said not all former EDS employees face wage cuts and that the salary realignment," enables hp to effectively drive its pay for performance strategy with a consistent job-based foundation for rewards, development and organization planning," said an hp spokesperson.
HP also says CEO Mark Hurd took a 20 percent cut on his base salary of nearly $10 million dollars a year, however when reminded that Hurd also made an additional $23.9 million in bonus pay, the spokesperson said, "You're comparing apples to oranges," and said Hurd was paid his bonus for meeting certain business expectations set out by hp over a three-year period.
Former EDS employees also said only U.S.-based employees are suffering the massive salary cuts under Hewlett Packard and that foreign-based employees are not seeing reductions in their salaries. Hewlett Packard would not comment on this or if there are any plans to outsource jobs overseas.
The employees said in the end it's customers who'll suffer, customers who signed on with EDS before the company was bought by hp. They describe the mood of the employees as dismal, discouraged and defeated. Those who haven't gotten letters or emails warning of salary cuts expect them and one employee describes spending part of the day doing his job and part of his day looking for a new job.
As for the man who decided to speak up first, he's worried about having a job tomorrow. Even with a third of his salary gone, it's still a job in the same office he's had for more than a dozen years. Unless he can find a new one quickly, his only option is to show up for work.
"It's a slap in the face. That's the only way you can take it, is that it's a slap in the face," the man said.
First Published: Aug 5, 2009 12:44 AM EST
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