By many measures, it has been a tough year for employees of Electronic Data Systems. After Hewlett-Packard bought the computer services company in August for $13.9 billion, it immediately began hacking the work force.
Led by a master cost-cutter, Mark V. Hurd, HP laid off 25,000 EDS workers, and cut the salaries of some by more than 20 percent. Mr. Hurd even stripped the EDS brass of their plush offices and corralled them in cubicles.
But despite the risk that angry employees and customers would walk out the door, the acquisition has paid off well for HP — so well, in fact, that an important rival has decided to strike a similar deal. Dell announced this week that it was paying $3.9 billion for Perot Systems, the Texas computer services company started by H. Ross Perot after he left EDS
Plenty of employees have complained about HP’s tactics, but the company says it has persevered through the turmoil to keep most of EDS’s customers. Last quarter, HP’s operating profit margin on services hit 13.8 percent, the highest level in a decade. And the combined company’s services division is HP’s biggest business in terms of revenue — a remarkable metamorphosis for what has long been viewed as a slow-growth maker of PCs and printers.
On Wednesday, HP will take another big step toward full integration of EDS, extinguishing the 47-year-old company’s name. The new name, HP Enterprise Services, reflects the union of the services operations at the two companies.
“I acknowledge that we have done a lot of hard stuff, but this is all about getting HP in a position where we can compete and win,” said Ann Livermore, an executive vice president at HP who heads its services and data-center-products businesses.
In talks with EDS employees, executives have put it more bluntly. At one meeting in…