HP Slashes Jobs, Pays CIO $15.3 Million

By Ed Oswald | Published July 18, 2005, 2:14 PM

A source close to Hewelett-Packard indicated over the weekend that the company plans to cut at least 15,000 jobs from its workforce, with the biggest cuts coming to the IT, sales and service divisions. The news comes as HP said in a filing that it planned to offer new CIO Randall Mott a $15.3 million pay package.

Sources said that the job cuts would save the company an estimated $1 billion per year and were being done to improve cost efficiency compared with HP's competitors. The official word on the layoffs could come as early as this week; company representatives said they would not comment on the speculation.

Meanwhile, a filing with the Securities and Exchange Commission indicated that HP's new CIO Mott would be awarded a base salary of $690,000, including bonuses of 100 percent of Mott's salary in both 2005 and 2006, as well as an option for 500,000 shares of common stock in the company.

The filing also indicated that Mott will receive a $2.2 million signing bonus, 285,000 shares of restricted stock valued at some $7.11 million, performance cash of $7 million from 2005-2008, and a $1 million allowance to relocate.

The job cuts at HP have been massive in recent years. Carly Fiorina laid off nearly 15,000 in 2002 and 2003 after HP's merger with Compaq, and 4,500 employees have been laid off this year alone.

Even if profits are boosted, however, some analysts say these continued large layoffs run the risk of damaging the morale of the company's workforce.

The job cuts at HP would constitute approximately 10 percent of the active workforce as of the latest survey by financial research firm Sanford C. Bernstein & Co.

Comments

And you guys say baseball players are overpaid...

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I'm glad to see that HP, like the other IT giants, are displaying their patriotism by moving another 15,000 jobs to Asia.

Viva Capitalism!!!

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thire ya go hp can your work fource and give the big guy 15 mil a year ,lol,lol the rich get richer and the poorer get poorer........

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HP is doing the most stupidist thing ever. They shout cut off their HPiPods that they are failing to sell and make their own MP3 Player. Don't fire these people make them work on a HP PlaysForSure product.

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HP has sucked forever and a day.

The only thing they do good is 4000/4050 series laserjet.

They should throw everything else in the dumpster.

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Their Scanjet 4p and 5p were good too, as well as the DeskJet 932C--other than than you're right...HP, Hilariously Pathetic.

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Remember "Commodore" - the ones who came out with the "C64" and "Amiga"?

They screwed up very badly a computer that was about 10 years ahead in time.

You know why? Because those who were in charge used the existing money in such way for their own benefits that a really big firm like "Commodore" went down to the ground completely.

Could it be the same for HP?

I ask myself this question very often:

How can it be that people are working, working, giving their best - tens of thousands of people, mark it - and in spite of that a big company goes bankrupt?

By what invisible and mysterious force can a workflow of such an immense power be led into the bin?

Couldn't it be because of misuse of those who have the power in this firm?

And yet they call for a "strong man" again. This is irrational.

BTW - how many prisoners are working currently for HP for a nickel and a dime a day? Should be some thousands, too...

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I agree w/ almost all of these posts. The only good that comes out of situations like these is the company going under. HP is obviously in trouble. Laying off some 20,000 employees over the last 5 years speaks volumes about the current situation. Their only option at this point is to keep over-paying some a$$hole to come in and see if he can turn things around, but with HP always being the last to embrace new technology, I doubt they will survive the next big technology craze. Put it this way if you needed to save a billion dollars, you are in trouble...

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Only an American company fires workers to pay for management idiots. Amazing. I'll bet HP could find a cheaper CIO if they outsourced the job. I hear Fiorina is selling Amway these days out of her garage.

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Wow, Slug.

Do you remember capitalism? Someone is better than you at it, so it's wrong now. Is that it?

Corporate America is all about money. But they can't exist in America because there are people who will work for less in other parts of the world.

You want your jobs back? Get competitive. If you can't then too bad for you.

Adapt or die. That is the way of the world.

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Hey Pal,
You want to tell that to my kids? You want them to think that people like you are making things better?

Also I was working for 15 to 20k less then the field was paying so jees that was not being competitive and they were the ones who said this is what they were paying.

Your a comedian. Must be a HP stock holder.

OBTW, I guess you do not believe in raises for any workers below a CEO either do you?

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I don't own stock in HP. I hate HP.

I believe that someone should get paid what they are worth.

To many people have the attitude "Minimum labor for minimum wage". Unions have destroyed America. They continue to do so.

Since I'm not a CEO, I certainly believe in raises for myself. I'm worth it.

I didn't have anything to do with HP laying off those people. HP did. If someone worked for me, and weren't making me money, then I would fire them.

In fact, I have done that. If he is worried about his family, then he should have worked harder and contributed to the company.

His line was, "I don't call customers, they call me." Fired!

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what?? You actually support this oversea hiring bs? Those indians are getting payed 10k a year if that...and there's no way they do a better job then anybody here. I know, I've worked with an outsourced developer in india, that was the biggest pain. Projects were delayed, source code had to be tripple checked and corrected, support was none existent...that's ok tho' right cuz the company saved 60k/year on him initially...ended up spending triple that in added costs to correct his curry code.

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I am refusing to by another HP,Compaq Product.
This is wrong what happened to the Pride in the US workers?

Talk about sell outs and thieves. This whole cutting US I.T. and Tech Workers have better stop. I think it is time to let the Federal Government Jump in and check into Treason from companies like this.

Stealing Benefits, Jobs, and Trades has got to stop. We have already given enough to the rest of the world.

We are paying higher Fuel Prices, loosing a Trade that helped put serious money in the economy. Let the CEO have to face these people and have to hear about each one being impacted.

Also they are cutting demand for people getting any more Technical Training which also means closing of Schools as well.

Tell you what CEO tell your kids their new Nike's comes from cutting people and making them starve in AMERICA yeah show your a Patriot you sick $OB.

Also when you continue to see loosing money and you can not figure out you also cut many of your own customers. You are creating a continuous spiral of your own doing.

I say make each Corporate Officer face an IRS audit, and then the Share Holders.

Gees a $1,000.00 per cut employee talk about incentive to be a PO$.

Also Billweh you are correct they do not care about anyone anymore. It is greed and it is sell outs that are destroying our economy only the ones with money have no problem with this fram of thinking. They care less I say they need to be called upon it.

IBM,HP,Compaq, yeah the Leaders are now destroying Millions of workers and care less.

God I need to go before I vomit.

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They just fired a bunch of Americans, so now I'm not buying the stuff they were manufacturing overseas anyhow! Nice going, slug!

You misguided, GED-if-you're-lucky blue collar types make me convinced that America is in trouble. Instead of paying for an HP, you say you won't since they're laying off people. Yet if you don't buy their stuff, they'll continue laying off people.

I don't like HP's computers. I bought one when they first hit the shelves. I went to upgrade the memory on my machine and found that you had to disassemble the two-layer motherboard to do so. It also broke within the warranty period. HP's old school customer service was excellent once it was escalated, and in fact, they even bought back the machine for what I paid for it. That was very cool. But I was no longer interested in their computer products. At very least, they made me content with them. Maybe their computers are still crap -- that's what I hear anyhow. But all low end machines are. So if you choose to buy a low end machine, why not buy HP? Why not help a brother out?

And by the way, Einstein, it's losing money, not "loosing". Thanks for helping the information economy. You may now turn off your AOL dial-up connection. Your brain is as full as it's going to get today.

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There go my plans to support HP in buying one of their computers. When are these companies going to figure it out that it's time they stop screwing the little guy?

Between the layoffs and jobs moving over seas, there isn't going to be anyone able to afford to buy any of the crap these companies are selling. And there's no way you are going to convince me that some person in China who's making a whopping $0.30 (yes thirty cents) an hour is going to spend that hard earned money on a computer when it means that no one in the family gets to eat for the next five years.

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Hah...$0.30. Lots of people in China make ATLEAST $0.40/hr. :P

(that was agreeing, btw)

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you really need to do a little market research.

30 cents an hour in china is roughly equal to making 8 bucks an hour in the US.

30 cents an hour is enough to pay for accomodations, food, and some small luxuries in life.

unlikely a car, or a computer, but if all the necessities are covered, it's enough to keep them out of poverty.

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If China didn't peg its currency to ours and properly valued it, there wouldn't be an incentive to move these companies out.

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eh.... You obviously haven't been to China.

They are damn poor, especially in the country side. In the city? Almost everyone is poor. This somehow does not apply to Shanghai and Bejing, where there are less poor people... until you get to the outskirts of the city, where everyone is poor. Believe it or not, the big cities are making the poor even more poor because it is now beginging to cost a little more to live.

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" 30 cents an hour is enough to pay for accomodations, food, and some small luxuries in life."

Oh ya, if you've been to china, you'll notice that $8 (or 30 cents) does not buy you a half pound of beef and a celery stalk. Your food expenses (not fast food or restaurant) usually equal about 50% of your daily pay.

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