Did HP discriminate against older workers in massive layoffs?

Four former employees of Hewlett Packard (HP) are accusing the company of discriminating against older workers in layoffs of 85,000 employees.

In a proposed class-action lawsuit filed Aug. 18 in US District Court in San Jose, Calif., the former workers, who were in their 50s and 60s when they were cut, said that while the company was laying off thousands of its employees to cut costs beginning in 2012, it was hiring thousands of younger employees to replace them.

“While HP has been carrying out its drastic layoff plan, which is believed to be the largest in American history . . . Meg Whitman . . . has publicly made it abundantly clear that her overarching goal is for HP to get younger,” claimed the defendants in their filing.

The lawsuit points to comments made to analysts and media by Ms. Whitman, CEO of HP Enterprise, and the current chair of HP Inc.'s board of directors, describing a company strategy “. . . 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,” to stay competitive, claim the plaintiffs.

To accomplish this, points out the lawsuit, HP posted online job ads that stipulated that only recent college graduates can qualify for some positions, which weren’t specified in the filing. This helped to meet HP’s human resources department requirement that 75 percent of external hires be recent college graduates or "early career" applicants, the lawsuit claims.

HP denies the allegations and will defend against them, says company spokesman Tom H. Suiter. “Any decision to implement a workforce reduction is always difficult, but we take care to make tough decisions based on legitimate, non-discriminatory reasons,” Mr. Suiter wrote in an email to The Christian Science Monitor. HP, based in Palo Alto, Calif., split into two companies in November: HP Inc. and Hewlett Packard Enterprise, both of which are defendants in the suit.

HP is one of many big-name US companies, including Goldman Sachs, Halliburton, Microsoft, and Procter & Gamble, to lay off thousands or tens of thousands of workers in recent years, as part of restructuring efforts or to cut costs when business is down. In some cases, the cuts target highly paid workers, who tend to be older, in order to replace them with younger and thus cheaper employees.

“[That’s] one reason for voluntary buyout programs in both the public and private sector,” writes Joshua Freeman, a labor historian at the City University of New York, in an email to the Monitor.

 The tactic of cutting employees to boost profits has become increasingly common.

“There was a time when social norms around laying off workers when the firm is performing relatively well would have made it harder. Now it’s fairly normal activity,” says Adam Cobb, management professor at the Wharton business school, in a recent blog post on the school's website. 

As layoffs have grown, so have complaints of discrimination, which increased notably following the 2008 financial crisis that resulted in massive layoffs. That year, there were nearly 25,000 age discrimination complaints filed with the US Equal Employment Commission, 60 percent more than were filed in 1997, the first year for which records from the commission are available. The rate has slowed in the years since, but it's still high; the number of age discrimination complaints filed in 2015 was 30 percent higher than the nearly 16,000 complaints in 1997. 

HP isn't the only tech giant that has come under recent fire for its staffing practices. In 2015, Google was sued by a group of people who said they were rejected for jobs because they were over 40. Such lawsuits could bring mixed results for workers, says Joanna Lahey, a business professor at Texas A&M University who specializes in age discrimination.

“On the one hand, increased scrutiny of layoffs and firing could help workers who are currently employed from unfair dismissals,” says Dr. Lahey in an email to the Monitor. “On the other hand, this kind of scrutiny could make employers more wary of hiring older workers.”