EDS workers face more pay cuts

Hewlett-Packard Co. is cutting some EDS workers' pay again, this time by up to 30 percent or more, according to some angry employees.

Officials at H-P, which acquired the Plano-based technology outsourcing company last year, said the cuts would not affect most employees and were being made to align EDS salaries with those at H-P.

That explanation did little to comfort some workers.

"I have been with EDS for almost 15 years, and the pride I once had in being a part of this organization has slowly and now surely become embarrassment and disgust," one Dallas-area worker said in an e-mail Wednesday.

H-P would not confirm the size of the pay reductions, though it did not dispute the reports of cuts ranging up to more than 30 percent.

This is the third pay cut for EDS workers this year, on top of roughly 25,000 layoffs announced last September after H-P completed its $13.9 billion purchase of the company.

The first pay cut, in February, affected all H-P and EDS employees and ranged from 2.5 percent to 20 percent.

In April, all EDS workers in the U.S. and Puerto Rico who made more than $40,000 had to take a one-month, 10 percent cut. At the time, H-P told EDS employees that no permanent salary cuts were being considered.

Several EDS workers said in e-mails and blog comments that the new round of pay cuts would apply only to U.S. employees. H-P, which has been notifying affected workers over the last several days, did not respond to requests for confirmation of those comments.

Several workers said the cuts would be very deep for them. Some making roughly $75,000 said they would see their salaries slashed to about $55,000, about 27 percent.For some workers, the reduction will come in waves, with part of it coming Sept. 1 and the rest scheduled for a year later.

The 15-year EDS vet – who verified his employment by supplying a copy of the pay cut notice he received from H-P – predicted the new cuts would lead to resignations.

"I know that my career with this company is coming to an end," the man, who spoke on the condition of anonymity, said in a follow-up phone interview. "I can't survive after this kind of hit."

His comments were echoed in numerous letters and online postings from EDS workers.

H-P doesn't disclose the current employee count for EDS locally, nationally or globally. But when the H-P purchase was announced in 2008, before the 25,000 job cuts, EDS had about 7,000 employees in the Dallas area, 48,000 nationally and 140,000 globally.

The company has remained profitable even during the severe recession. It reported earnings of $10.5 billion in 2008 on sales of $118.4 billion. For the second quarter of this year, H-P reported a profit of $1.7 billion on sales of $27.4 billion, numbers that were down a bit from the same period a year ago.

In February, chief executive Mark Hurd said he was taking a 20 percent cut in his base pay. But his salary of $1.45 million in 2008 was a fraction of his $42.5 million in total compensation.

At the conclusion of its most recent pay cut notice to employees, H-P included the following coda: "Thank you for your continued focus and dedication during this time of change. Working together, we will continue toward a successful integration process."