HP Confirms Deal with Ciber for Laid Off Enterprise Services Staff

A number of newly laid off Hewlett-Packard (HPQ) Enterprise Services employees will be offered jobs at IT consultant Ciber in a brokered deal the vendor obliquely referred to on its recent FQ3 earnings call, according to a Business Insider report.

Ciber is a Denver, CO-based IT solutions provider leveraging HP products and services along with offerings from Microsoft (MSFT), Oracle (ORCL) and SAP (SAP). It is also what HP calls a “labor partner,” meaning the two companies have a subcontracting agreement.

Here’s the upshot of their deal: HP brokered an arrangement with Ciber in which the solution provider will offer jobs to an undetermined number of staffers from the vendor’s Enterprise Services business unit. The backroom deal enables HP to skirt paying severance–typically one week’s pay for every year worked–to the laid off ES employees.

HP confirmed the agreement with this statement provided to Business Insider:
“HP reached an agreement with a strategic labor partner, Ciber to allow more flexibility in managing labor demands. There are a small number of employees who will move from HP to Ciber, and become contractors to HP’s Applications Delivery Services organization. HP will continue to own and manage the end-client relationship and overall service responsibility.”

Ciber will make the job offers to HP ES personnel sometime this week, Business Insider reported, with staffers having only 48 hours to make a decision.

Here’s the background on the deal: On HP’s FQ3 earnings call, chief financial officer (CFO) Cathie Lesjak alerted analysts that the vendor, which took $401 million in separation-related charges for the quarter, still has some additional restructuring left to do with HP Enterprise.

Restructuring invariably is shorthand for layoffs and Lesjak suggested as much. Some 3,900 people exited the company in FQ3, she said, and by the end of FQ4, HP could add another 5 percent to its prior total job loss estimate.

That raised some eyebrows, especially when Lesjak and chief executive Meg Whitman deflected requests for more information to HP’s upcoming analysts meeting on September 15.

In HP’s FQ3 2015, sales in the ES unit fell 11 percent to $4.9 billion. Whitman, however, trumpeted its performance, saying on the earnings call that ES “significantly improved its sequential revenue trajectory and delivered another quarter of sequential and year-over-year profit improvement.”