HP: So much for that pay cut excuse to avoid layoffs

News last night that HP plans to cut more workers after announcing in February that they were going to cut everybody's salaries to avoid layoffs. Seems like HP has done the old bait and switch to their employees with this one.

HP employees are probably not real motivated by the news, if the comments on this Barron's article are any indication. OK everybody, work hard and make less!  Repeat!

This is exactly the sort of thing that I've been concerned about in this economy.  Wages being cut by companies with lots of money in the bank that are making profits. Yes, I know the responsibilities of management lie with shareholders, but does that mean that employees don't matter?  In the end, customer service takes it on the chin and that is very difficult to repair.  Does that then mean that customers don't matter either?  

Comments

[nate]

I think it's absolutely disgraceful for any company to cut any pay or worker in this economy when they are either profitable or have tons of cash in the bank.

Something I've been real worried about in general is how all of these "productivity" gains in semi-recent years/decades have contributed to a permanent reduction in the number of workers needed to do a particular task. Meanwhile we're still adding more people and need more jobs.

Last I recall the most recent economic expansion did not create enough jobs in the U.S. to recoup the jobs lost during the last recession, and now we've even fallen below that bar. We're probably a decade behind in job growth now needed to sustain the population. It's really depressing. I've been fortunate as I've landed in a growing industry and I've worked my ass off these past 8 years to get where I am today, though it's come at a high personal cost to me. I'm much better prepared for this depression than I was the last recession(where I was unemployed for 8 months, and I was lucky, I knew people who went a year or two without finding a job).

The U-6 ("official real")unemployment rate is ~15%, I think the *real* unemployment rate is quite a bit higher than that, there are tons of people that just aren't counted anymore.

The CBO projects unemployment will remain pretty high(above 2008 levels) until roughly 2014.

And now there are stories around the government funding GM's off shoring of jobs to China to build fuel efficient cars there to import them back to the U.S.

We're really screwed on so many different fronts as a society/civilization. The drastic changes that are needed to control things just aren't going to happen, we're too fragmented a country to be able to set off in any one solid direction.

I'm convinced it's only a matter of time that the system we know so well will just collapse entirely and we'll have to come up with something new, that will be pretty rough. I see things today as a big bubble and government/corporations are under it trying to push it ever so slightly higher, long enough so they can cash out and retire before the whole thing implodes.

One analyst I saw somewhat recently put it pretty well - we have it in our power to fix things, but it's not going to happen until we feel a lot more pain, in the mean time we're committing trillions of $ to try to avoid feeling that pain in the short term.

A good example is the U.S. auto industry who was against higher fuel standards for so long, "let the market decide!" Well the market decided in about 3 months last year and caught them with their pants down.

The longer we wait, the harder it's going to be.

Maybe I should stay away from the news, ignorance is bliss right?

[marc farley]

Putting people out of work in order to maintain business metrics is nothing new, but it doesn't mean its the right thing to do. I don't think its a particularly good business strategy, but I'm not running any companies either.