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San Diego
Wednesday, May 22, 2024
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Hewlett-Packard Pares Staff at Its R.B. Campus

One hundred employees at Hewlett-Packard Co.’s San Diego facility accepted voluntary severance packages as part of the company’s plan to maintain its No. 1 market status for printers.

HP, the Palo Alto-based electronics manufacturer, which employs about 1,800 people at its sprawling 80-acre campus in Rancho Bernardo, said 1,905 employees companywide accepted the severance packages, the details of which were not released.

The number of employees accepting the severance “significantly reduces the need for work force reductions in HP’s imaging and printing group facilities in the U.S. and Puerto Rico,” said HP spokeswoman Monica Sarkar.

Sarkar didn’t say the voluntary retirement program would eliminate the prospect of future job cuts.

“As the business climate continues to change, we will continue to evaluate our business need and will make additional adjustments,” she said.

Following the departure of 100 staffers in Rancho Bernardo, the local site would have about 1,700 employees, although Sarkar wouldn’t confirm that figure. HP has a worldwide employment of 150,000, and had annual revenues of $80 billion last year.

Staff reductions at other HP sites in its imaging and printing group were higher. According to a report by the Associated Press, about 570 workers from a total of 4,000 in Corvallis, Ore., and 350 workers from a total of 3,700 at its Boise, Idaho, plant accepted the severance packages, which ranged from five months to 14 months of pay.

Those accepting the retirement packages will be leaving their jobs starting May 31, and the program should be completed by Oct. 31, Sarkar said.

HP implemented the staff reductions as part of a “transformation process to maintain market leadership, improve cost structures, and improve its competitive leadership,” Sarkar said.


Growing Competition

While HP’s imaging and printing group contributed 73 percent of the company’s profit last year and has dominated the printer market for years, estimates show revenue growth slowing this year as firmly entrenched competitors such as Lexmark, as well as upstarts in the field such as Dell, Inc. hone in on HP’s market share.

The company began a reconfiguring of the imaging and printing unit during the tenure of then-Chief Executive Carly Fiorina in a program dubbed “Operation Lead Dog.”

The plan was supported by new Chief Executive Officer Mark Hurd, who was appointed following the ouster of Fiorina this year, according to a report in Business Week.

Sarkar wouldn’t comment on the report, which quoted unidentified HP managers and an outside consultant.

Besides the voluntary retirements, HP’s plan includes exiting certain underperforming areas, such as corporate copying machines, which it got into some 18 months ago, Business Week said. Instead, HP will put more emphasis on the burgeoning consumer market in digital cameras, and providing photo services.

In its most recently completed first quarter, ended Jan. 31, HP reported net income of $943 million on revenues of $21.5 billion. Sales were 10 percent above the first quarter of 2004, while profits were 0.7 percent higher than the like period of year ago. The printing unit had first-quarter sales of $12.9 billion, 7 percent higher than the same period of 2004.

HP has operated a design and development center for its imaging and printing group in Rancho Bernardo since 1968, and two years ago had more than 2,100 employees there. In addition to research and development, the site contains marketing and information technology functions.

The imaging and printing group is managed by Viomesh Joshi in Rancho Bernardo, but the company doesn’t regard the local site as the group’s headquarters.

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