Original URL: http://www.theregister.co.uk/2008/08/14/eds_nervous_workers_hp_takeover/

EDS knits bigger net for voluntary redundancies

Blighty staff worry if they'll ever meet HP

By Kelly Fiveash

Posted in Financial News, 14th August 2008 08:17 GMT

Updated EDS has more than doubled the pool of workers pinpointed for possible voluntary redundancies in the UK, The Register has learned.

The firm's UK-based permanent and contracted employees are increasingly anxious about Hewlett-Packard’s imminent takeover and whether they will still have a job with the firm once the merger completes.

One anonymous inside source told The Register that EDS has significantly broadened its voluntary redundancy plan over the past month or so because of a lack of “suitable” volunteers.

Over the past few days we have heard from EDS employees who have claimed that yet another round of job cuts was in fact underway. Some have suggested the firm was hoping to say goodbye to as many as 20 per cent of the staff in the firm’s public sector unit, known internally as the HUB, over the coming months.

According to a July-dated internal EDS document, seen by The Reg, the company has shown 968 HUB contractors the door since May 2007. And it doesn't end there. EDS plans to let go of a further 71 contractors working on public sector projects by the end of 2008.

The firm has categorised remaining contractors benefits to EDS based on cost, length of service and particular skills. It is currently projecting its total end of year contractor headcount to be 200 for the HUB unit.

Meanwhile, the document also revealed EDS's progress with permanent staff: "Internal redeployment both within the HUB and from WTO [which ominously stands for Workplace Transfer Organisation] is being managed effectively, with a high volume of displaced staff backfilling for voluntary attrition," said EDS in the document.

Butcher sharpens knife

In May the IT outsourcing giant said it was planning to cut up to 90 UK-based jobs as part of its "ongoing restructuring and re-skilling programme". EDS workers were told that the firm had pinpointed some 700 jobs, where staff could apply for voluntary redundancy, which included 323 positions in the public sector (HUB) department.

However, EDS continues to insist that compulsory redundancies are “not on the radar” even though, according to the source, HP is “getting EDS to jump through hoops” ahead of the takeover.

The IT services company has been scaling back its workforce over the past year with announcements every few months about lay-offs. This slow drip effect has unsurprisingly left many staff fretting about their jobs.

Public and Commercial Services (PCS) union rep Graham Steel told El Reg that the rumour mill has been working overtime at the services giant:

“People at EDS in the UK, even at middle management level don’t really know what’s going on… Every week there are rumours that people will be on HP’s contracts to others suggesting that some parts of the business will stay with a firm EDS identity for a year or so before perhaps migrating to a new identity further down the track.”

Jangling nerves

He said that staff are “incredibly nervous” because of the number of voluntary redundancies already undertaken by EDS over the past year. “People are worried that the takeover will mean more dramatic changes [including the possibility of compulsory redundancies] and we are worried about what the merger will mean.”

Steel told us that the latest job cuts in Blighty were now expected to be in the low 200s, however he could not confirm any numbers. “EDS has been very careful about how they handle this over a long period of time because if the numbers get too big the consultation period gets much larger. So, in some respect, they’ve been quite clever in keeping them in quite small batches,” he added.

HP will close the $13.9bn global deal to buyout EDS in the third quarter of this year, with details of the agreement expected to be finalised no later than next Monday (18 August). The computer giant was given an overwhelming nod of approval from the firm’s shareholders late last month. Both companies have also received clearance to merge by European Union and US regulatory authorities.

Meanwhile, Steel told us that the union hasn’t had any direct discussions with HP at this point. He added that PCS has seen membership increase dramatically, which demonstrates the unease being felt among EDS workers right now.

He said HP will “have to recognise us around the public service contracts with TUPE entitlements. But beyond that I don’t imagine that HP will be desperate to get involved with the unions and we’ll have to work very hard to make sure they have to. But signs are encouraging.”

EDS currently employs around 16,500 staff in the UK alone. It holds a number of key public sector contracts that include providing IT services to the Department for Work and Pensions and the Ministry of Defence.

We have asked EDS if it can confirm its voluntary redundancy plan has indeed been extended to more employees to help the firm hit its cull target. However, at time of writing it is yet to respond to our request for comment. ®

Update

EDS has since been in touch to tell us that it does not "recognise the 20 per cent figure suggested".

The company is "focused on ensuring that as our business needs change, we can reskill and redeploy our people in line with those needs," it said in a canned statement.

"We are currently focused on such activity in specific areas of our UK operation. This does include consideration around voluntary severance, which is on a very limited basis."

EDS added that any "future workforce management decisions" would be communicated first to "our people and respective consulting bodies". The firm also told El Reg that HP's acquisition of EDS "is not related to this activity."