Whoever coined the phrase “40 is the new 30” probably never worked at a technology startup. Entrepreneurs are notorious for hiring tribes of 20-something workers apparently willing to work longer than the post-industrial, 40-hour work week. (At least that’s the story line.) But perceptions of ageism, like the ones documented in Dan Lyons’ infamous memoir about HubSpot, aren’t limited to up-and-coming companies.
An age-discrimination lawsuit filed in mid-August against HP Inc. and Hewlett Packard Enterprise by four former employees accuses the pre-break versions of these companies of laying them off and transferring their jobs to younger workers. What’s more, they accuse the tech giant of putting a system in place to encourage this practice.
Their complaint, which seeks class-action status, suggests that these employees were deliberately targeted for dismissal because of their age (all of them were older than 40 when they were let go) as part of CEO Meg Whitman’s master plan to move to a younger workforce. As evidence, they cite comments Whitman made back in 2012 to analysts about HP’s need to “reshape and recalibrate” its labor pyramid to include more younger people: “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 [for] real challenges.”
Taken on its own, Whitman’s comment is pretty innocuous. Certainly, no one could blame any manager for hiring with future succession in mind. Or for looking for candidates who have experience in newer skills, such as digital design or social media experience. Or for looking at a whole gamut of factors—from salaries to past performance—as a divining rod for deciding who stays and who goes during periods of belt-tightening. The suit suggests, however, HP went too far to make room on the payroll for younger workers. And Whitman’s mention of recalibration could prove problematic.
As you might expect, both companies plan to defend themselves against the charges. But when you consider all the rightsizing happening right now at giant tech companies to prepare for the reality of cloud computing and digital transformation—I’m thinking especially of you managers at Cisco and IBM—you can expect the age question to draw far more scrutiny in coming months. The real question should be: Who has the best understanding of your customers, regardless of their birth date? As in all other hiring matters, diversity isn’t just the safest approach legally, it’s the wiser choice.
BITS AND BYTES
VMware pushes reset on cloud strategy. Its evolving agenda prioritizes helping businesses manage applications running on services from IBM, Amazon, and Microsoft rather than pushing its own cloud servers, storage, and infrastructure services. Stay tuned for more news from VMworld, this week in Las Vegas. (Bloomberg)
Nutanix snarfs up two companies. The data center software company is buying PernixData, which sells a system for organizing storage devices, and Calm.io, which specializes in software for automating the deployment of software applications. (Fortune)
New drone rules now in effect. Regulations guiding commercial operations, including a nighttime ban and rules that require drones to be in view of operators, went into effect Monday. Now the government is preparing for an influx of applications from pilots seeking official licenses. (Wall Street Journal, Bloomberg)
Humans will no longer pick topics for Facebook’s “trending” section. Subjects will be displayed along with the number of people discussing it. The change was made after accusations of bias earlier this summer. (Fortune)
New U.S. immigration policy favors entrepreneurs. A proposed rule—one that doesn’t require congressional approval—could allow foreigners who are building new businesses in America to gain entry for up to five years. Data from the National Foundation for American Policy suggests more than half of U.S. tech startups valued at more than $1 billion have at least one immigrant founder. (New York Times)
Republican revives debate over Internet sales tax. Rep. Bob Goodlatte of Virginia has suggested another new framework for managing commerce across state borders. His idea would create a “sales-and-use” tax structure that would reflect the polices of both where a business is based and where the consumer lives. The goal of his plan, which is backed by Amazon, is simplicity. (Wall Street Journal)
PEOPLE AND CULTURE
Tech giants make equal pay commitment. Apple, Facebook, IBM, Intel, and Microsoft all signed the White House pledge late last week. They’ll conduct annual, companywide pay analyses, and review hiring and promotion practices with an eye to closing the gender gap. Cisco and Salesforce have been on board since the initiative was announced in June. (Fortune)
Laptop computer pioneer dies at 75. British engineer John Ellenby worked at the influential Xerox Palo Alto Research Center before he founded Grid Systems, which made one of the first successful “clamshell” models. Two of Grid’s early adopters were Bank of America and Chevron. The company was eventually bought by Tandy, the predecessor to RadioShack. (New York Times)
Tim Cook unloads $36 million in stock. The Apple CEO sold 334,000 shares last week, according to a regulatory filing. That leaves him with 1.31 million, currently worth around $140 million. (Fortune)
Here’s why Google shut down one of its cloud customers. Amid the hype around cloud computing, it can be easy to forget that the customer still has to carefully set up its own software and hardware configurations just as it did when running all its own equipment in-house.
Fred Trotter, chief executive of Houston-based health care research startup CareSet, learned this the hard way last week when his company got a warning from Google that one of his systems appeared to be launching “intrusion attacks” against third parties. That marked the beginning of a very rough patch for the company.
IN CASE YOU MISSED IT
Intel Reportedly Approached Apple About Making iPhone Chips, by Aaron Pressman
Business Software Firm Apptio Files to Go Public, by Jonathan Vanian
Why Silicon Valley’s Not Quite Boom Isn’t Quite a Bust, by Erin Griffith
ONE MORE THING
What Twilio CEO Jeff Lawson learned at Amazon.com. Writing down ideas in long form versus relying solely on PowerPoint slides is a good way to debate the fine details of strategy. On the latest Fortune Unfiltered podcast, Lawson shares his views on compensations and “diligence in decision-making.” (Fortune)