Monday - September 15, 2008

The Squirrel That Ate EDS

Once upon a time, before 9/11, I worked for EDS. Electronic Data Systems. Ross Perot’s old company. I was a computer programmer and a software tester for them. We were rent-a-slaves, several hundred of us working out of a swank little office building in Bedminster NJ. Before 9/11, before the telecom blowout, we were riding high. But all our eggs were in one basket: we all were outsource workers for AT&T. When we lost Most Favored Company status the game was over. I met the company President, Dick Brown, when he visited our office on 9/12. He didn’t have much choice; he was stuck in the area because no planes were flying. “I think this might be the straw that breaks the camel’s back” he told me. And it was. A week later the layoffs started, and a month later I was out of a job. That’s when we all found out that the termination package, which had been generous up to then, had quietly been changed a few weeks earlier so that nobody, no matter how many years they had worked for the company, could get more than 4 weeks severance pay. Thanks Dick.

The company had a rocky time for the next few years. There were 110,000 employees when I joined them, and thousands upon thousands of us were laid off. Things never really got better for them, and now they’ve been devoured by one of their arch competitors Hewlett Packard. I bet they didn’t see it coming either, as IBM was the only company they considered to be an actual competitor back when I worked there. Too bad EDS. Looks like one of those pesky little annoying squirrels you used to look down on has taken you out. And now you’ll be lucky to get your 4 weeks severance pay.

Hewlett-Packard to Cut 24,600 Jobs in EDS Integration
Hewlett-Packard’s plan to integrate technology-services provider EDS includes cuts of 24,600 jobs, or about 7.5% of the combined work force, H-P announced late Monday.

The restructuring program is expected to save $1.8 billion in costs and take place over three years, the company said. Nearly half of the job cuts are expected to come in the U.S., though H-P said that employees affected by this deal will be given job training, counseling, and severance packages.

The company also said that over the same three-year time period, it expects to replace roughly half of these positions “to create a global workforce that has the right blend of services delivery capabilities to address the diversity of its markets and customers worldwide.”

H-P said it will record a charge of $1.7 billion in the fourth quarter of fiscal 2008 relating to the restructuring program, $1.4 billion of which will be recorded as goodwill and $300 million of which will be recorded as a restructuring charge.

The acquisition of EDS, which was announced in May, continues a multiyear strategy to build out H-P’s position in the marketplace that began with the acquisition of Compaq, said Shane Robison, the company’s chief strategy and technology officer.

“H-P has a strong track record of making acquisitions and integrating them to capture leading market positions. We will deliver on the promise of H-P and EDS for our customers and shareholders,” said Mark Hurd, H-P chairman and CEO.

Are you thinking that “squirrels” is just a bit of Drewish hyperbole? Hell no it ain’t. That is exactly how they thought of the competition. They even tried to sell this concept to other nose in the air businesses, with one of their insanely expensive Superbowl commercials that nobody else understood. Just like Cat Herding and Building Airplanes In Flight, Running With The Squirrels was a spectacular failure. And now, so is EDS. It’s a real train wreck.

Posted by Drew458     on 09/15/2008 at 09:05 PM   
Filed Under: • Big Business •  
• Comments (2) • Trackbacks(0)  Permalink •  

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