HP New Zealand net profit rises 64%; engages with unions

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Like its US parent, HP New Zealand has recorded a recession-defying result, but is nonetheless battening down for worse times ahead. Measures include a series of pay-cuts.

HP does not comment on local results, put a filing with the Companies Office show its New Zealand division recording a net profit of $27.4 million for the year ending October 2008, a 64% gain on the prior year’s $16.7 million.

Revenue fell slightly to $600.9 million, from the year-ago $602.2 million.

Tight cost control, including a $5 million reduction in staff costs, helped the company turn a higher profit on the flat revenue.

On February 19, HP, the world’s second largest computer company after IBM (and the largest in NZ), reported a quarterly profit dip of 13% to $US1.85 billion on revenue up 1.2% to $US28.8 billion. While its PC and printer divisions fell back, there was strong growth in software, and services (via recent acquisition EDS).

While the result was positively buoyant next to most other big techs, chief executive Mark Hurd nonetheless projected tighter times ahead, and announced a series of pay cuts.

Members of the company’s executive council will take a 15% haircut; other managers will receive a 10% trim and regular staff 5%.

The global cuts took effect in the US immediately, but will be rolled out to other countries under a timetable based around local labour laws.

In the UK and Australia, unions have already said that no cuts will go through without staff consent.

A spokesman for HP New Zealand spokesman told NBR, “We are still working through the local implications of the global announcement, including engagement with unions where appropriate.”

Mr Hurd has positioned the across-the-board paycuts as a way to avoid the mass lay-offs that other companies have carried out during the meltdown.

A separate initiative last last year saw around 20,000 staff made redundant across the two companies as HP absorbed EDS. The combined comany has around 300,000 staff.

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2 Comments & Questions

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HP gave its top CEO, Mark Hurd, $25.4 million in cash last year, including a $1.45 million salary and $23.9 million in bonus money. Plus stock awards worth $7.9 million, $738,392 plus miscellaneous items, including $98,000 dividends paid on his restricted stock holdings and $71,482 of relocation compensation. The total amount of pure money he cashed in 2008 is $42.5 million US dollars. And now he wants his employees to cut 5% of their base pay? No way!

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IBM is allso in New Zealand. This makes HP the second largest computer company in New Zealand after IBM and not the first.

Oh and the now retired EDS boss got paid a lot in bonuses too :D

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