Irish staff may escape worst of HP's 24,600 jobs cutback

IRISH STAFF at technology giant Hewlett Packard (HP) may be spared the worst of the cost-cutting which will see 7.5 per cent of its workforce or 24,600 people offered severance packages.

The cutbacks are part of HP's integration of EDS, the technology services company it acquired earlier this year in a $13.9 billion (€9.8 billion) cash deal.

The restructuring will take place over a three-year period and the company says will save it $1.8 billion (€1.27 billion) a year. It will take a charge of $1.7 billion (€1.2 billion) in its current quarter which ends on October 31st relating to the changes.

"Workforce reduction plans will vary by country, based on local legal requirements and consultation with works' councils and employee representatives, as appropriate," the company said in a statement.

HP employs about 4,000 people on the island of Ireland in six different business units. Approximately 400 EDS staff transferred to HP as part of the deal. The bulk of these were located at a facility in Dublin's Treasury Building which supported customers across Europe.

Yesterday afternoon sources close to the company said the impact was likely to be felt in HP but was "more likely to impact on the EDS side".

The Irish Bank Officials' Association, which represents workers at HP and EDS last night sought a meeting with HP management. It said it wanted any redundancies to be on a voluntary basis.

HP, in common with other technology companies, is attempting to generate more of its revenues from higher margin services, such as consulting and support, rather than simply selling hardware and software.

Its biggest success to date came in 2003 when it won a €500 million seven-year contract with Bank of Ireland to manage all its technology functions - the largest outsourcing contract ever awarded in the State.

HP generated revenues of over €600 million in the 12 months to the end of October 2007, an increase of 15 per cent on the previous year. The company said as well as reducing the combined workforce, savings could be made in "corporate overhead functions" such as real estate, IT and procurement. The Irish operation has already begun the task of reducing its property costs. Last November HP said it would move a customer support centre for the European, Middle Eastern and African markets, which was located in a leased premises in Clonskeagh, to its campus in Leixlip.