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The "Labor Pyramid"


Meg Whitman -- (at the time CEO of HPE, DXC board member, and former chairman of HP) -- explained Hewlett-Packard's objectives with respect to staffing at a Securities Analyst Meeting:


"...a question that is actually completely relevant for all large-cap IT companies, which is how do you keep up with this next generation of IT and how do you bring people into this company for whom it isn't something they have to learn, it is what they know.

"...we need to return to a labor pyramid that really looks like a triangle where you have a lot of early career people who bring a lot of knowledge who you're training to move up through your organization, and then people fall out either from a performance perspective or whatever.

"And over the years, our labor pyramid... has become a bit more of a diamond. And we are working very hard to recalibrate and reshape our labor pyramid so that it looks like the more classical pyramid that you should have in any company and particularly in ES. If you don't have a whole host of young people who are learning how to do delivery or learning how to do these kinds of things, you will be in real challenges.

"So, this has a couple of things. One is we get the new style of IT strength and skills. It also helps us from a cost perspective. ...if your labor pyramid isn't the right shape, you're carrying a lot of extra cost. The truth is we're still carrying a fair amount of extra costs across this company because the overall labor pyramid doesn't look the way it should.

"Now, that's not something that changes like that. Changing the shape of your labor pyramid takes a couple of years, but we are on it, and we're amping up our early career hiring, our college hiring. And we put in place an informal rule to some extent which is, listen, when you are replacing someone, really think about the new style of IT skills."


October 9, 2013 HPQ Securities Analyst Meeting transcript -- page 60:

- HPQ website. http://h30261.www3.hp.com/~/media/Files/H/HP-IR/documents/events/09-10-2013/hpq-transcript-2013-10-09t15-00.pdf 

- Google cache of HPQ website:  http://webcache.googleusercontent.com/search?q=cache:ZLkbdRW_VEcJ:h30261.www3.hp.com/~/media/Files/H/HP-IR/documents/events/09-10-2013/hpq-transcript-2013-10-09t15-00.pdf+&cd=5&hl=en&ct=clnk&gl=us


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