HP Grabs $14.5B Job Creation Tax Break As It Celebrates Layoffs

from the how-does-that-work? dept

theodp writes "As long as Congress is PO'ed at HP for blowing privacy smoke up its ass, perhaps they should take a look at today's 10-Q SEC filing, in which HP boasts that it: 1) 'Repatriated $14.5 billion under the provisions of the Jobs Creation Act of 2004,' 2) Reaped additional 'savings from our workforce reductions,' and 3) Expects more savings from 'subsequent headcount reductions ' that will further curtail pension and medical liabilities. With 'Job Creators' like this, who needs Chainsaw Al?"

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  • identicon
    Anonymous Coward, 12 Sep 2006 @ 12:21pm

    HP - Poster Child of the New Economy?

    reply to this | link to this | view in chronology ]

  • identicon
    Matt Bennett, 12 Sep 2006 @ 12:41pm

    Dunn did it!

    reply to this | link to this | view in chronology ]

  • identicon
    Sanguine Dream, 12 Sep 2006 @ 12:43pm

    Wow...

    I understand that the timing looks bad but damn. I'm sure HP was working to comply with the Job Creation Act of 2004 since 2004 and they just got their reward for it. It just happens that they are now setting plans in to motion for layoffs. So while it would be easy to accuse them of created the jobs for the sole purpose of laying them off after they get the reward I doubt it really went down like that.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 12 Sep 2006 @ 1:12pm

      Re: Wow...

      How about this thought.

      Take into consideration Dunn's recent activities as CEO.

      People generally don't make just "one" mistake, especially if it's regarding ethics. You either have ethics, or you don't.

      My thought is defraud, but hey, I'm pretty much a moron when it comes to finances.

      reply to this | link to this | view in chronology ]

    • identicon
      Jim, 12 Sep 2006 @ 1:15pm

      Re: Wow...

      Did you even read the linked article? There is no connection between the creation of jobs and tax forgiveness under the so-called Jobs Creation act. The Act is a deceptively-named Republican giveaway to big corporations.

      reply to this | link to this | view in chronology ]

    • identicon
      Jason, 12 Sep 2006 @ 1:16pm

      Re: Wow...

      "It just happens that they are now setting plans in to motion for layoffs." Not exactly. I have worked for HP for 7 years. They have been laying off... er wait... the proper term is WFR (workforce reduction) for at last 6 of those years. Every month or two another team will get whacked and 4 or 5 or 6 people will be gone. Has been going on like that for as long as any of us can remember. You can well imagine just how wonderful the morale is around here. There have been no hirings. No raises. No company performance bonuses. Just the ever looming spectre of more WFRs. For the record, I am looking elsewhere for work. If anyone needs a ColdFusion Web Developer, let me know.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 12 Sep 2006 @ 1:31pm

        Re: Re: Wow...

        Actually we are looking for a good CFMX developer. If you want to post your email address, include your city and moving prefs. BTW, this is the new Techdirt Jobline.

        reply to this | link to this | view in chronology ]

  • identicon
    Puzzled Cubicle Prisoner, 12 Sep 2006 @ 1:17pm

    OMG

    Sanguine Dream makes a valid point but the fact of the matter is that a company that managed to cash in on the Jobs Creation Act is now set to fire all those people. But not before they cash the check the taxpayers wrote them. F U very much, please come again!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Sep 2006 @ 1:19pm

    I agree. She should be investigated. Her salary is more than likely tied to savings. If she inflates costs then suddenly finds a way to reduce all these costs through a loophole in the law (that was meant to create jobs.. not eliminate them) then its possible the whole ordeal warrants an investigation.

    Then again.. between King Bush and Congress.. who's to say they aren't being paid too? Maybe their line item in HP's budget is tied to our "representatives" voting record? What's the going rate for a senator these days? Anybody know?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Sep 2006 @ 1:35pm

    It's not really a "tax break."

    The $14.5 billion in cash was the amount of HP's own cash that they moved back into the US from where it's stashed overseas at various HP divisions. The actual tax break (in other words, how many fewer dollars they send to the government) might be closer to $1 billion or so, not the $14.5 billion number. The idea is to get cash from foreign bank accounts to the US bank accounts. Then US banks can use it to loan against. Those $14.5 billion can be used to loan on the order of $150 billion into the US economy when it's deposited into a US bank, where it puts $0 into the US economy when it's deposited overseas. If the government can essentially "pay" 1% of the $150 billion that gets into the economy in the form of a one-time tax break to get people to move that money from overseas, that's way cheaper than paying 5.5% per year for 10 years to issue $150 billion in new Treasury debt to loan to the banks via the Federal Reserve System. Note this is not a partisan political comment, but a comment from a financial analyst who's seen this happen with other companies.

    reply to this | link to this | view in chronology ]

    • identicon
      That Guy, 12 Sep 2006 @ 2:20pm

      Re: It's not really a "tax break."

      Eat that Jim. I bet you think republicans caused global warming too. What a crock.

      reply to this | link to this | view in chronology ]

    • identicon
      Ivory Bill, 12 Sep 2006 @ 7:19pm

      Re: It's not really a "tax break."

      Not really a tax break?
      The only reason that these earnings stayed offshore to begin with is because it was deemed too expensive to repatriate them at ordinary tax rates.
      The fact that the tax break is designed to lead to desirable consequences (in this case, in increase in the US credit limit) used to be the reason that tax breaks were enacted -- to encourage behavior deemed desirable by Congress. But its still a tax break.
      (From in International Tax CPA who has seen this happen more than once).

      reply to this | link to this | view in chronology ]

    • identicon
      Bruce, 18 Sep 2006 @ 7:31am

      Re: It's not really a "tax break."

      thanks for the clarifiaction. Most folks do not try to read in between the lines of the Headlines and understand that there is always another side to the story.

      reply to this | link to this | view in chronology ]

  • identicon
    Matt Bennett, 12 Sep 2006 @ 2:14pm

    I agree. The act has a really lousy name and it all looks very sinister, but the fact of the matter is it results in a lot of money being "repatriated" which seems unlikely to be a bad thing.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Sep 2006 @ 9:40pm

    Oh who needs employees? They're just a huge liabilty. They break down and burn out for some reason.

    I have an idea, lets put the MAJOR shareholders to work and see if they want all that stress.

    reply to this | link to this | view in chronology ]


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