Arabian Business Weekly Update July 24, 2005

As HP wields the axe, it’s about time the firm asks itself some serious questions. HEWLETT-Packard, the US-based computer and IT group, led by new chief executive and president Mark Hurd, last week revealed that over the next 18 months it plans to cut 14,500 staff across the globe — equivalent to about 10% of its total workforce. Unfortunately, some of these cuts will affect its 700 regional workers. Some estimates suggest that up to 200 regional workers could go.

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By  Massoud A. Derhally Published  July 24, 2005

HP... It’s time to reinvent|~||~||~|As HP wields the axe, it’s about time the firm asks itself some serious questions. HEWLETT-Packard, the US-based computer and IT group, led by new chief executive and president Mark Hurd, last week revealed that over the next 18 months it plans to cut 14,500 staff across the globe — equivalent to about 10% of its total workforce. Unfortunately, some of these cuts will affect its 700 regional workers. Some estimates suggest that up to 200 regional workers could go. HP hopes to save US$1.9 billion a year in costs after the cuts, which are the first signs of Hurd seriously stamping his authority on the group. HP is also hoping to generate a further US$300 million in ‘benefits savings’ — it is dissolving its Customer Solutions Group, which specialises in selling to smaller businesses. And guess where most of the job cuts will come? Naturally, the aim is for HP to “continue to provide world-class service and avoid impacting customers”, or as Arabian Business puts it, “to continue to make as much money as possible with as few staff as possible”, so a few sales jobs will go. Surprise, surprise there, then…. Last week HP said: “The majority of staff reductions will come in support functions, such as [IT], human resources and finance. The remainder will be made inside business units.” So… who will take up the slack and make up for the dismissals then? HP’s existing staff — those lucky souls who just about managed to dodge the axe — that’s who. But will they get a pay rise for all the extra work they’re going to be doing from a company hoping to save US$1.6 billion in wage bills? I doubt it. HP’s slogan is ‘let’s invent’. Perhaps they should change it to ‘let’s reinvent’. Doing more work for the same money is a new and innovative concept after all… ||**||Admit it|~||~||~|IT IS ABOUT time ministers and MPs acknowledge that the US-led invasion of Iraq has increased the threat from terrorism. Before the US and Britain entered Iraq in 2003, top UK civil service officials told Tony Blair that “Al-Qaeda and associated groups continued to represent by far the greatest terrorist threat to Western interests, and that threat would be heightened by military action against Iraq”. It added that the collapse of the Iraqi regime would increase the risk of chemical and biological warfare agents or technology finding their way into the hands of terrorists. This week on page 22 we feature experts from a Chatham House report, which links the war in Iraq with the London bombings. Top research groups acknowledge it, the public knows it — and it’s about time that politicians admit to it. ||**||Elusive peace|~||~||~|The images beamed out of Gaza of thousands of settlers attempting to undermine Israeli prime minister Ariel Sharon’s disengagement plan were reminiscent of images of the uprooting of illegal settlements in the Sinai peninsula and the Egyptian town of Taba after the commencement of the Camp David talks between Egypt and Israel. Many have contended only Sharon would be able to orchestrate such measures, but then again he is the father of the settler movement and encouraged the illegal colonisation of land whenever he could. The surge in bloodshed in Gaza, visible in the media as Hamas and Israel fight it out is worrying and has placed the onus on Palestinian president Abbas to rein in the militant movement, which could raise the prospect of a more violent confrontation between the PA and the militias in the territories. ||**||

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