HP Shutters German Site as Part of Larger Services Restructuring
HP’s decision to close the site and lay off 850 employees is connecting with the company’s plans to remake its Enterprise Services unit.Hewlett-Packard's aggressive plans to revamp its Enterprises Services business and restructure the entire company are resulting in the shutting down of a site in Germany and the laying off 850 people. In a statement released Feb. 1, HP officials said the move to close the facility in Ruesselsheim, Germany, is part of a larger effort by the company to get back on more solid financial footing after several quarters of disappointing financial results and a stock price decline of more than 50 percent since Mark Hurd left as CEO in 2010. In October 2012, CEO Meg Whitman outlined a multi-year turnaround plan for the tech giant, which has been hampered by mismanagement, constantly changing leadership and a worldwide PC market that is seeing sales contract rapidly as consumers buy more tablets and smartphones. Part of that turnaround plan includes 29,000 job cuts—HP has more than 300,000 employees—with a significant portion of the layoffs reportedly falling on the Enterprise Services unit. The shuttering of the facility in Germany is part of that effort to restructure Enterprise Services. The 850 job cuts represent about 8.5 percent of HP's work force of 10,000 in Germany. Those people will be able to apply for positions at other HP sites, the company said. The 250 or so employees at the site who aren't losing their jobs will be able to transfer to positions with HP partners or clients.
"As we described during our securities analyst meeting in October, HP Enterprise Services has an aggressive plan to optimize its portfolio and its sales and delivery model, and to improve its cost structure, resource management and operations," Mike Nefkens, executive vice president of HP Enterprise Services, said in a statement. "The changes we are announcing in Germany today are a necessary part of our commitment to deliver our long-term operating model."