HPE, HP Inc. Hit with Age Discrimination Lawsuit

By Jeffrey Burt  |  Posted 2016-08-26 Print this article Print

Four ex-employees say HP targeted older workers as it cut tens of thousands of jobs, and that the practice continued after the company split in two.

The two companies that came out of the breakup of Hewlett-Packard last year are being accused by four ex-employees of age discrimination in the massive layoffs that started before the company split in half and that continued after the restructuring.

In the 25-page lawsuit filed Aug. 18 in U.S. District Court in San Jose, Calif., the four former workers said their layoffs were part of a larger concerted effort by executives for the companies—including Hewlett Packard (HPE) CEO Meg Whitman, who also chairs the HP Inc.'s board of directors—to use the tens of thousands of job cuts over the past several years to not only pare expenses but also to make the workforce younger.

HP initiated a round of layoffs in 2012 that eventually swelled over the years to about 55,000, and as the giant tech vendor neared the Nov. 1, 2015, date for splitting in two, company officials said another 30,000 jobs would be lost after the breakup occurred.

The split created HPE, which sells enterprise IT solutions, and HP Inc., which focuses on PCs and printers.

In their lawsuit, the plaintiffs—Donna Forsythe of Washington, Dan Weiland of Texas, and California residents Sidney Staton and Arun Vatturi—claim that as part of the HP's workforce reduction plan, company officials targeted older workers and replaced them with younger ones. All four were in their 50s or 60s when they were laid off.

"HP has hired a disproportionately large number of new employees under the age of 40 to replace employees aged 40 and older who were terminated," they said in the lawsuit.

They claim that in 2013, HP's Human Resources unit sent out written guidelines stating that the company was requiring that 75 percent of outside hires be right out of school or what they called "early career" applicants. They also argue that the high-profile layoffs were less about reducing the workforce and more about replacing older workers with younger ones.

"Since HP's so-called workforce 'reduction' efforts began in 2012, HP has continued to hire aggressively," the lawsuit claims. "The only difference is that HP has hired a disproportionately large number of new employees under the age of 40 to replace employees aged 40 and older who were terminated."

They also point to comments Whitman has made over the years about her desire to bring in younger employees. For example, in a November 2015 interview on CNBC soon after HP announced further job cuts, the CEO, responding to an interviewer's question, said that the latest layoffs "should be it" for the company.

"That will allow us to right-size our Enterprise Services business … to make sure that we've got a labor pyramid with lots of young people coming in right out of college and graduate school and early in their careers," Whitman said. "That's an important part of the future of the company."

The company also used early retirement plans to try to strong-arm older workers into leaving the company, the plaintiffs said.

In a statement to the media, HPE officials said the company is committed to "the principles of equal employment opportunity and age inclusion is no exception. The decision to implement a workforce reduction is always difficult, but we are confident that our decisions were based on legitimate factors unrelated to age."

In their own statement, HP Inc. officials said that they are aware of the claims in the lawsuit, "deny them and plan to defend against them."


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