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HP cuts workforce by 5%, looks to probe GM hires

HP says 18 of its key IT employees depart suddenly for jobs at GM, hints that more may leave for the automaker

Computerworld - Hewlett-Packard reduced its workforce last year by 17,800 employees, more than half way to the restructuring goal it announced last year. Most of the departures came via layoffs, though some key IT workers left unexpectedly.

The company employed 331,800 worldwide as of Oct. 31, the end of its fiscal year, according to a Dec. 27 10-K filing with the U.S. Securities and Exchange Commission.

Last May, HP announced plans to cut its worldwide workforce, as part of a turnaround effort. Overall, the company last year said it was looking to cut 29,000 workers, or about 8.3% of its global workforce, through layoffs and voluntary incentives by the end of 2014.

An HP spokesman said Wednesday that the company is "on track" to meet the restructuring goals. Some workers in HP's IT services unit in Austin are leaving on their own to take jobs with General Motors, a major HP customer, according to a state court filing last month in Texas.

HP is asking the Texas state court for permission to depose two of its former IT managers who left for GM. HP wants to investigate whether employment contracts were violated.

HP, especially since its acquisition of EDS in 2008, has been a longtime IT services provider of GM.

But GM CIO Randy Mott, a former CIO of HP, last year detailed plans to move the automaker away from a highly outsourced model and take some of its IT work in-house.

In September, GM said it was hiring 500 IT positions in Austin to staff a new IT center. GM's career site lists numerous development jobs.

On Nov. 30, 18 employees of HP's Global Information Technology Organization in Austin "resigned en masse and without notice" and "immediately began working for General Motors in Austin in GM's new IT Innovation Center," according to court papers filed by HP.

HP's court action was reported by the Austin Business Journal, which posted the court filing (PDF).

HP, in its court papers, said the sudden departures affected at least four teams within HP's IT organization, "and HP expects that additional resignations will follow as the departed employees will likely seek to build out their teams by filling in with subordinate employees from HP."

In the case of the two IT managers, HP alleges that their hiring agreements included a clause that prevents them from soliciting HP employees.

"HP strongly suspects that something other than mere coincidence will explain the en masse departure, on the same day and to the same place, of 18 employees working within the same organization," the company said in its court filing.

HP believes that the resignations "were the result of concerted activity by the departed employees but needs to take depositions pre-suit to determine the causes of action it may have," it wrote.

A GM spokesman said the company cannot comment on the allegation. HP also declined comment.

In May, HP announced plans to cut 27,000 employees by the end of 2014. In September, it added 2,000 to the list.

At the end of 2011, HP had 349,600 employees. The cuts through Oct. 31 represent about 5% of its global workforce for that period.

Previously, HP had said that it expected to cut about 12,000 by end of 2011 fiscal year.