HP cuts some EDS salaries by upto 47 percent
By Pulkit Sharma

Hewlett Packard, like most tech companies, is feeling the chill winds of a global recession.  The turning point was the first quarter (ending Jan 31) when net income dropped by 13 percent.  The highly regarded HP CEO, Mark Hurd, wrote to everyone in February, about the necessity of pay cuts. Mark led by example and cut his own salary by 20 percent

Salary cuts for senior executives were in the 10 – 15 percent range, and other employees lost 5 percent.

The writing was in the wall by Dec, 2008. HP India has about 60,000 workers. HP employees in India were told they would no longer get their historical salary increases of as much as 13 percent.  And a request was made to curtail costs in India. HP India has some history with pay cuts.  In 2001, there was a ‘voluntary pay cut scheme’ for 4 months. 

In May 2008, Hewlett Packard paid $14 billion to buy EDS. This merger has HP-EDS India breathing down the back of market leader IBM.  EDS India was partially merged with MphasiS India (an HP subsidiary) and partially merged with the parent Hewlett Packard.

In a quirk of fate, salary cuts announced by CEO Mark Hurd were only implemented for EDS employees who were transferred to HP India.  EDS employees who joined MphasiS India had no salary reductions.  And all are working for the same parent company.

But EDS India employees can count their blessings in this global recession.  Not only are they working for a blue chip employer HP, their pays cuts have been minimal. Their counterparts in USA have not been so lucky.

Nbcbayarea.com is reporting that EDS USA employees who transferred to HP USA are facing pay cuts of between 10 and 47 percent.

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An EDS USA (now HP) employee of between 12-20 years 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.

"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.
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HP has confirmed the cuts.  HP/EDS India is not affected.