Fresh job cuts for EDS Australia

Australian EDS staff have suffered a fresh round of job cuts this week, according to sources, as local employees vote on whether to accept a 10 per cent pay cut handed down globally by new parent HP.

Morale is very low in the organisation

EDS Australia sources

Sources within EDS have told ZDNet.com.au that EDS staff in the sluggish Canberra market and its NSW Burwood centre were bearing the brunt of the cuts, with a fresh round numbering around 250 set to go this week across Australia.

"Morale is very low in the organisation and the level of support that [EDS] are providing to their customers [is] declining," sources within EDS claimed.

It was unclear whether the alleged cuts were part of the company's merger plans announced last year, under which it would cut around 7 per cent or 450 staff from its 6,000-strong joint workforce over the coming three years in Australia and New Zealand.

HP spokespeople have been unable to respond to ZDNet.com.au today.

The alleged cuts made recently by the company follow CEO Mark Hurd's announcement in February that HP would cut salaries of senior executives and staff in order to prevent further layoffs.

According to the Association of Professional Engineers, Scientists and Managers, Australia (APESMA), which has been in negotiations with HP over recent months, all permanent Australian staff have been asked to vote on accepting a pay cut of 10 per cent — the same level that only US managers were asked to accept.

"There is an email ballot of employees to see whether they will accept the pay cut or not, and [HP/EDS] will look at that before determining the next lot of job cuts," APESMA CEO Chris Walton told ZDNet.com.au this morning.

"There is a wide and blunt axe going through the company internationally, even through the business fundamentals in Australia are quite solid," he added.

APESMA CEO: Chris Walton
(Credit: APESMA)

HP Australia's revenues rose 1.8 per cent last financial year to $3.27 billion; however, net profits fell 45 per cent to $44.3 million. It spent $513.7 million on staff. Meanwhile, HP's local executive team took home $5.35 million, up $110,000 from last year.

But while permanent staff vote on the 10 per cent pay cuts, contractors have not been given the opportunity to vote on the ballot, said Walton. "We believe contracting staff have been required to take a pay cut if they wish the contracts to be renewed," he said.

Meanwhile, Walton said that while HP/EDS' Australian executives would be taking a 20 per cent cut, though "close scrutiny would suggest that their bonuses are not being affected," he said.

If true, Mark Hurd would take a 20 per cent cut to his $1.45 million salary last year, with the US$42 billion in bonus payments and share options remaining unaffected.