H-P To Lay Off 14.5K

[jyl]

If it "sucks to be French" (see other thread), it must really suck to be a Hewlett-Packard worker.

The company will lay off 14,500 employees and freeze most US pension benefits. Sounds like most of the layoffs will be at US headquarters and other regional HQs. If it is any consolation, Wall Street was rooting for 25,000 layoffs (investor disappointment that "only" 14,500 H-P'ers will be canned is why the stock is down this morning).

IBM is laying off 14,500 as well, but most of those are in Europe. (I'm sure some of you hope they are French, eh?)

In the meantime, both H-P and IBM are aggressively expanding their operations in India and China. IBM will probably employ 30,000 in India by year-end. These Indian employees are not replacing manufacturing workers. They are replacing US-based lower-level white-collar workers who earn, typically, around $30-45K, as well as US-based software programmers.

The movement of jobs from the US to low-wage countries is a big deal, although you wouldn't know that from what you hear out of Washington DC.

[IROC]

I don't care what kind of positive spin is applied to "outsourcing" I think it is going to be the death of alot of American companies.

I am a former McDonnell Douglas employee who now works for Boeing (due to the "merger"). As a company, Boeing has laid off somewhere in the neighborhood of 70,000 people since we merged in 1997. Sad.

Mike

[Joeaksa]

Mike,

Really know what you mean! Am also an ex-MacAir employee, then switched over to Boeing after the merger. Lasted a year with this arrangement and was offered a early out on my contract (was overseas in Saudi) and got out before they laid more off.

Not everyone is doing this. My boss was looking at outsourcing jobs in India and the Dominican Republic. We talked to him and told him our experiences with CSR's from these areas and asked him if he really wanted this type of feedback in his company. He ended up keeping most of the jobs in country as well as shuttling some of them to our sister company in Canada. Would rather support the GWN than India anytime...

That said, sending jobs out of the country is doing nothing but hurting us...

JoeA

[widebody911]

I work @ HP, and yesterday was bloody. 50 people RIF'd in my organization.

I've been doing some test infrastructure development that's being deployed in the US, India and Germany, and I've seen firsthand the massive growth of HP's investment in the India. Upper management has been very careful to downplay the outsourcing, but in the course of this project I've seen they have almost 2x as many people as we do in our lab, and 3x as many test systems.

Face it - we've been sold out. Corporate America has trained and equipped the 3rd world, forcing us to compete against them on price. It's all about the short term.

(now to just sit back and watch the Pelican "Captains of Industry" explain how this is a Good Thing.)

[legion]

I work extensively with "offshore" and "onshore" programmers from India. My experience? It takes one "onshore" coordinator for every two Indian (onshore or offshore) programmers. When there work is done, it's total crap. (Often doesn't compile, rarely works, never complies with coding standards.) The coordinator ends up redoing all of the work anyways. So...you had one coordinator and two programmers doing the work of two programmers--three people doing the work of two. Some cost savings, huh?

What's the problem? These Indian programmers are "externals", not employees. They are paid by volume and have no concept of quality. They don't understand the business problems underlying the programs they are writing. Also, culturally, they are reluctant to ask questions, and instead make assumptions about things they don't understand. I have, on more than one occassion, been told "we have a small problem" by an Indian programmer. An understatement if I have ever heard one. For them to come and admit any problem, it means the sky is falling.

[Superman]

All part of Dubya's Master Plan. Like the Iraq thing....we're just too stupid to recognize a brilliant plan when we see one.

[lendaddy]

The quality will come. It's just a matter of education and experience. The companies may be paying an upfront cost (low quality) now, but the rewards are only a few years away I'm sure. Remember how we mocked Japanese quality, then Chinese? Now Indian and Pakistani. It will come.

I don't understand the anger. I'm just as affected by this (automotive) yet I understand. The American companies simply cannot stay competative without this. The other option is to stay here and burn the wick for a decade or so....then go belly-up. I can't blame them for thinking ahead.

It's better we take our reality injection slowly and gradually than all at one time I assure you. I wish we could pay wet behind the ears IT guys and hub cap installers $70k a year too, but it just ain't in the cards anymore. The fact that we did/could at one time is flat asss amazing, but to expect it as SOP is silly.

We'll be fine, I don't know where we're headed just yet, but I have faith in our system.....we'll be fine(perhaps better than fine yet again soon).

[gaijindabe]

What is the unemployment rate right now amongst the college educated and technology capable workers in the USA?

How has empolyment in these fields and wages grown over the past 25 years?

[IROC]

Originally posted by lendaddy
We'll be fine, I don't know where we're headed just yet, but I have faith in our system.....we'll be fine(perhaps better than fine yet again soon).

len...I'm struggling to see where your optimism is coming from here. When you say "we'll be fine"...who is "we"? Not the displaced workers. The corporations might be "better than fine" in the short term, but no one has adequately explained to me how this is a "good thing" long term.

Mike

[lendaddy]

Originally posted by IROC
len...I'm struggling to see where your optimism is coming from here. When you say "we'll be fine"...who is "we"? Not the displaced workers. The corporations might be "better than fine" in the short term, but no one has adequately explained to me how this is a "good thing" long term.

Mike

Mike,

I am optimistic because I believe our system is such that we will react at lightning speed to the next great opportunity. We always have and we will again.

People don't like my answer on your second part, but it's just brutal honesty:

These "displaced workers" were cutting the fat hog in the asss for years before this. The fact that they are upset by or unwilling to take jobs at pay levels they actually deserve is the problem. It's more of the entitlement mentality, the idea that you are owed or that gov. should guarantee you a $60k a year salary for a $35k a year job is a sad state of affairs IMHO.

[lendaddy]

I want to add...... The level of pay vs actual worth is always at ebb and flow. The last two decades were hugely in favor of the workers. They were in general paid much more than they were actually worth. This is fine and part of the system. The problem is that everyone expects it to never swing back, well that's not possible. It's just not.

[legion]

Originally posted by lendaddy
The quality will come. It's just a matter of education and experience.

When the quality does come, so will the wages, thus erasing any competitive cost advantage.

My real worry is putting your company's trade secrets (our real competitve advantage) in the hands of people who do not work for your company. I'm sure they would be happy to share their knowledge with some unknown startup Indian competitors when they get back home...

[lendaddy]

Originally posted by legion
When the quality does come, so will the wages, thus erasing any competitive cost advantage.

DING DING DING excellent!!!!!!!!!!

Exactly and that's just what we want...and equal playing field and whole new countries of people wanting/needing/and able to afford our products.

The speed at which this occurs has been accelerating with each generation. It won't be long.....hence my optimism

[mikester]

Originally posted by lendaddy
I want to add...... The level of pay vs actual worth is always at ebb and flow. The last two decades were hugely in favor of the workers. They were in general paid much more than they were actually worth. This is fine and part of the system. The problem is that everyone expects it to never swing back, well that's not possible. It's just not.

Personally I don't care how much I get paid as long as I can afford to support my family. That's the bottom line - so I can understand it when a worker who is laid of is more than a little miffed when they can't find a job that pays a rate compareable to what they were getting. OF COURSE THAT IS UPSETTING! If you can't sympathize with them at least then you're just unreasonable. Still...Jobs are out there.

In the last few months I've had so many calls for potential jobs that it's just crazy. Granted, there are network jobs and not straight "computer jobs" but they are still in what is considered the IT industry. This week I'm struggling to schedule 2 job interviews without disrupting my work schedule too much.

Jobs are out there right here right now.

Now; on the out sourcing and the whole indian deal in general. I work with a lot of them because we outsource a lot of Oracle related tasks directly to Oracle - they have a lot of indian employees and the quality concerns are real. Legion has a lot of good points - it takes a very good project lead to pull together all the strings these fellows put together. The do work well though and they are very well educated and have a very good work ethic. Much Much Much better than my own.

[on-ramp]

welcome to America, where big business reigns supreme, and to the land of the fee.

i dont think big companies care too much about the everyday workers who slave on the job making them billions of dollars, it's all about pleasing Wall St, no matter what the cost.

[kach22i]

Originally posted by Superman
All part of Dubya's Master Plan. Like the Iraq thing....we're just too stupid to recognize a brilliant plan when we see one.

We don't need no stink'n plans.

[lendaddy]

Mike, I didn't mean I don't feel for these people. Trust me, I've been near BK myself before. It's a horrible situation to be in. I was explaining it, not celebrating it.

[lendaddy]

Originally posted by on-ramp
welcome to America, where big business reigns supreme, and to the land of the fee.

i dont think big companies care too much about the everyday workers who slave on the job making them billions of dollars, it's all about pleasing Wall St, no matter what the cost.

Exactly, now that you know that you can stop expecting them to care. They don't, they won't, they aren't designed to.

[jyl]

Not sure I see this.

Wages are set by demand and supply, not (directly) by quality. For example, in certain areas of computers, Taiwan has fine quality engineers and manufacturing, yet wages remain at a significant discount to the US.

In China, I believe the quality of the work done by factories full of young women assembling circuit boards is every bit as good as you could get out of Americans, but they make a fraction of the wages, simply because there's a huge supply of them from the interior provinces.

Chinese and Indian wages are rising rapidly, and will continue to do so, but there's such a long way to go before they approach US wages.

Originally posted by legion
When the quality does come, so will the wages, thus erasing any competitive cost advantage.

[lendaddy]

John,

There have already been workers riots in China. The are trying their damndest to keep their people from knowing what the rest of the world is doing. They cannot hold back the surge for much longer. The people will rebel, just wait.