HP along with many other computer makers has been hit hard by the poor global economy. Some computer makers have announced losses over the last several quarters with many of the firms reporting their first loss in many years.
HP has fared better than many and has still reportedly posted revenue growth of a modest 1%. A workers union for high-tech workers in the UK called Unite has released a statement today expressing astonishment that HP has announced it plans to cut the salary of 300,000 of its global workers.
The reason the union is shocked about the announcement is that HP didn’t post a loss; profits still grew. According to the union, HP reported its numbers for the first quarter of 2009 and had a revenue growth of 1% amounting to GBP 20B and profits of GBP 1.3B.
Unite national officer Peter Skyte said in a statement, "UK employees who have made a key contribution to the doubling of the HP services revenue and borne the brunt of redundancies in Europe will be astonished that a company that is increasing revenue and still making substantial profits is seeking a pay cut from its UK workforce. Whilst the basic pay of senior executives is being cut, they will more than make up any reduction in basic pay by increases in their executive bonuses brought about by reductions in everyone else's basic pay."
Skyte goes on to say that HP has told the union that pay reductions will be made only with employee agreement and that coercion won't be used. The union says it is waiting to get those claims in writing. HP announced this week that its profits has dropped by 13% and cut its 2009 forecast.
quote: The reason the union is shocked about the announcement is that HP didn’t post a loss; profits still grew.
quote: By cutting the employees' wages, that means less money will be going into the local economy, which means less money for people to spend on other things, thus hurting businesses those HP employees would have used. Therefore, isn't this technically bad for the economy?
quote: This just seems like an excuse for HP to increase their profits and undermine the union.
quote: Actually, if all companies cut costs, they could presumably cut prices.
quote: A pay raise/cut does nothing to help or hurt the economy.
quote: It just moves the money out of one persons pocket, and into another’s.
quote: Ultimately, economic growth is the result of our ability to produce things, and how efficiently we use them. Everything else is just a shell game.
quote: I don't see how it makes sense for a factory line worker to receive more pay and better health benefits than an engineer or other trained professionals.
quote: Instead of helping their members, they have just blindly pushed for unsustainable compensation, for which their members are now suffering the consequences of such irresponsible greed.
quote: and their executives are definitely not dumb enough to start cutting after the loss.