Vancouver: HP mum on whether layoffs will affect local lab
Wednesday, May 23, 2012
Hewlett-Packard Co. offered no clues Wednesday as to whether its plan to eliminate 27,000 jobs worldwide to slash costs will affect its lab in east Vancouver, where an estimated 500 employees develop consumer printers for the company's global imaging and printing group.
If any of the planned layoffs hit Clark County, then local workforce development officials would engage HP to help former employees find other work, said Bonnie Moore, director of business services for two Vancouver nonprofits: the Southwest Washington Workforce Development Council and the Columbia River Economic Development Council.
HP says it will plow the savings it reaps from the job cuts into "three areas of strategic focus: cloud, big data and security, as well as in other segments that offer attractive growth potential," according to a news release.
What, exactly, that will mean for its Vancouver printer operations remains unclear.
The company reported earnings of $1.59 billion for the three months ended April 30 -- its fiscal second-quarter. But that's down 31 percent from $2.30 billion during the same period a year ago.
The company's sales also fell 3 percent to $30.7 billion.
Meanwhile, HP's Imaging and Printing Group -- to which the Vancouver lab at 1115 S.E. 164th Ave. is tied -- had sales of $6.13 billion during the company's fiscal second quarter. That's down 10 percent from $6.84 billion in sales for the same period a year ago.
What's more, documents the company has filed with
the U.S. Securities and Exchange Commission -- coupled with recent press accounts of the company's struggles -- show it faces multiple challenges.
30-plus years locally
Business observers in Clark County have watched sales lurch forward, then fall flat for years at HP, which has operated in Vancouver for more than 30 years. The company's only other Pacific Northwest plant is in Corvallis, Ore.
"HP has wonderful products, but they haven't figured out how to make it work," said Roger Qualman, chief operating officer of NAI Norris, Beggs & Simpson, a commercial real estate firm in Vancouver.
Three decades ago, local HP engineers invented and developed the company's hot-selling line of printers. Called inkjets, the printers boosted HP sales throughout the 1980s and 1990s, with the company's Vancouver workforce, which then included manufacturing, peaking in 1996 at 3,500. In 1999, printer manufacturing ended here and was moved to Malaysia, and HP has gradually been reducing its Vancouver workforce since then, which Qualman estimated at about 500.
"They've been laying people off and not filling positions for quite some time," he said.
In its 2011 annual financial report, filed with the SEC, the company says it faces a litany of challenges, including downgrades of its credit rating, aggressive competitors -- including those HP has alliances with in some cases -- and foreign and domestic lawsuits.
The company also acknowledges its collision with rapidly advancing technology: "Revenue and margins also could decline due to increased competition from other types of products," the company said. "For example, growing demand for an increasing array of mobile computing devices and the development of cloud-based solutions may reduce demand for some of our existing hardware products."
Fortune magazine story
The company also is struggling with low employee morale and fractured boardroom leadership, as illustrated by a sprawling story, "How Hewlett-Packard Lost Its Way," published by Fortune Magazine this month.
"Dr. Phil could fill a month's worth of shows just examining HP's board, whose dynamics have resembled those of rival junior high school cliques more than what is supposed to be a sage guiding force," according to the Fortune story.
In the company's 2011 annual financial report, the company's newest CEO, Meg Whitman, described 2012 as a "rebuilding year in which we will be doing the hard work that will position us to pursue consistent, profitable, long-term growth."
Qualman was not surprised to hear of the layoffs planned by the company -- which has nearly 350,000 employees worldwide -- noting Whitman, a former eBay CEO, has only recently stepped in to take the company's helm.
"She's been on the job for less than six months and trying to figure out how to make it profitable," he said. "She's a big action gal."