HP profits are too low
EXPENSIVE INK COMPANY HP has seen its profits fall by 17 per cent this quarter and has decided to take it out on its staff.
Apparently 6,400 employess, more than two per cent of HP's workforce, are going to have to pay the price for management's decisions and will be handed their walking papers shortly.
According to the AP, it is not clear why HP is being so hard on its workforce. The company's losses were in line with what Wall Street expected and the firm made $1.7 billion, which is nothing to sniff at.
While the outfit made shedloads from its services division, thanks to having bought EDS last year, revenues from its enterprise storage and servers division fell 28 per cent to $3.5 billion while its software revenues declined 15 per cent to $880 million.
HP said it expects its third quarter revenues will be flat and its full fiscal year revenues will decline by four to five per cent year over year. µ
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HP has cut some departments too thin already. And, given that the US is the only country where companies may summarily lay-off workers for no reason, 99% of Hurd's anger (How dare my bonus be jeopardized!)is directed at the US employees. Fortunately for employees in other countries, local labor laws save them from this kind of "increase my bonus at all costs" CEO mentality.
Solid logic on the part of the big multinationals. Their business model depends on cheap labor in Asia exporting products to the US and Europe. Demand for those products is way down because so many US and European workers are out of work--in many cases because those jobs got shipped overseas. Therefore they're going to lay off a bunch of US workers to reduce costs.
Ok.
Why aren't US workers moving to Europe? Lack of qualification, monolingualism, VISA problems? You tell me!
Ha ha...
PS: It's the H1-B workers' fault, isn't it?
Um, Feet and Inches, I think you might be confused. From an economic standpoint, there is no rational reason for an American to move to Europe (on economic grounds). At present:
1) The US and EU unemployment rates are roughly the same;
2) Historically, unemployment is significantly higher, on average than the US, a situation which is likely to return once the world economy stabilizes;
3) While there is rough economic parity between US and EU GDP, the US has historically higher economic growth rate;
4) GDP per capita, which is a much more accurate barometer of economic vitality than total GDP, in the EU is about 20K per capita lower than the US (26K vs. 46K respectively).
In light of these economic considerations, what reason would Americans have to move to Europe? And, more importantly, what does moving to Europe have to do with HP laying people off?
Ryan,
It may be true, but economic condition is not a measure of wellness. In Europe I think the standard of living in most countries is much higher than the U.S. despite many people complaining: more free time, more holiday, fresh and better tasting food (in most countries). If you get laid off by HP in the U.S. then you lose all the protection: no health coverage, no redundancy package no protection from corporate gangsters like Mark Hurd (Turd) who do whatever they want with people's lives (only aim is to please Wall Street and their own wallet),no social bumpers etc.
I'd rather be a jobless ex HP employee anywhere in the E.U. than in the U.S.
While there is rough economic parity between US and EU GDP, the US has historically higher economic growth rate;
US at the end of WWII US had half the world's wealth, Europe had rubble, now they are similar. How could the US have had a higher growth rate?
I think you have some valid points. I have a pretty good job here in the US of A, so I may have a different experience than some. But it's not as bad here as you might think :)
ihavenolimbs, there are two reasons why the GDPs of the US and EU are rougly similar now. First, after WWII, the US was the ONLY major industrialized economy left. Rather than maintaining our economic position, we spent tens of billions of dollars rebuilding the industrial complexes of Europe and Japan (e.g. the Marshall Plan, etc). Also, the US shouldered the significant majority of the defense expenses during the Cold War, which is perhaps one reason why the NATO military is always an American. I mean, didn't you ever wonder why there are US military bases all over Europe? Sure, by keeping the battle against the Soviets in Europe, we diverted much of the military threat away from North America...but the truth is we also kept Europe safe. If we hadn't, you wouldn't be on this discussion board right now, and you'd be speaking Russian...all right, Comrade?
Historical points aside, my limbless friend, the EU is a conferederation of 27 states, having twice the population of the US. So, by rights, a proper economic comparison is between, say, the US and France, not the US and the EU. Indeed, a proper North American analog of the EU would be something like NAFTA.
Seriously, though, the competition between the US and Europe is really stupid. For the most part, our governments know this...that's why we have things like NATO. I mean, to the rest of the world, we really are all (US, EU, Canada, Australia, etc.) "the West."
Saw on 60 minutes that 29 of the 31 guys at AIG directly responsible for financing the real estate bubble still have jobs. So, let me get this straight... white collar crooks who nearly single handedly bankrupted the richest country in the world still have jobs, yet guys at HP who helped make a 1.7 billion profit are whacked.
I don't have any problem with HP getting more efficient, but people in America need to wake up and realize that Wall Street and the banking community have taken over this country. We are merely serfs to the Wall Street barons.