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HP cuts third of workforce in Conway

Firm lays off 500 of 1,400 at customer-support center

By Jessica Seaman

This article was published July 9, 2013 at 12:39 a.m.

Hewlett-Packard Co. on Monday cut about 500 jobs at its customer-support center in Conway as part of the company’s strategy to turn around its struggling business, a spokesman said.

The layoffs, effective immediately, are part of the company’s plan to reduce its global workforce by 29,000 by October 2014 to reduce expenses.

“As part of our efforts to streamline our business processes, advance innovation and deliver the best possible experience for our customers, employees and shareholders, on July 8, 2013, HP internally announced plans to restructure its Customer Support Specialist/Contact Center footprint in Conway,” a spokesman for the company said in an email.

“This is a component of a plan announced in May 2012,” the spokesman said.

The company said the layoffs will not disrupt its customer-services operations and that it will provide some assistance to the employees who are let go. The company did not provide details about the form of assistance.

Brad Lacy, president and chief executive officer of the Conway Area Chamber of Commerce, said the chamber will try to help the people who lost their jobs find new ones.

“Our main goal right now is obviously to help the 500 people … losing their jobs,” he said. “That will be our main priority the next several weeks and months.”

Hewlett-Packard, which makes printers and computers, has been hurt by a consumer shift away from personal computers and printers toward mobile devices, such as tablet computers.

In its second quarter for fiscal year 2013, Hewlett-Packard reported a profit of $1.1 billion, down 31 percent from the same period a year ago. Revenue also fell 10 percent to $27.6 billion in that same period, according to the company’s quarterly financial results released in May.

Hewlett-Packard originally announced in May 2012 that it would cut 27,000 jobs, but in September the company increased that number to 29,000. It did not say why it increased.

Hewlett-Packard, based in Palo Alto, Calif., employed about 1,400 in Conway before Monday’s layoffs. At end of fiscal 2012, the company employed about 331,800 worldwide.

Hewlett-Packard has received several incentives since it opened shop in Conway in 2009, said Joe Holmes, spokesman for the Arkansas Economic Development Commission.

The state provided Hewlett-Packard $35.4 million in incentives, according to news reports in 2010. The company also benefited from an $8.3 million local incentive package.

The incentives included $10 million from the Governor’s Quick Action Closing fund, sales and use tax refunds on building materials and taxable machinery, a 1 percent income tax credit for payroll for new jobs in five years, and a cash rebate equal to 5 percent of payroll for 10 years.

The commission will be meeting with Hewlett-Packard in the next few weeks to determine how much money the company will return to the state because of the layoffs, Holmes said.

Conway Mayor Tab Townsell said he was not surprised by the layoffs because of Hewlett-Packard’s earlier announcements.

“No, I was not shocked, certainly disappointed,” he said. “This kind of news takes a little bit of shine and luster off Conway because these are good jobs.”

Conway had a labor force of about 30,700 and an unemployment rate of 6.6 percent as of May, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.

U.S. Rep. Tim Griffin, R-Ark, said he would work with the state and local leaders to help the employees affected by the layoffs.

“My heart goes out to all of those affected by Hewlett Packard’s announcement,” he said in a statement. “HP’s decision to restructure its business does not change the fact that Conway and Arkansas remain great places for high tech companies to call home, but it highlights why strengthening the economy and encouraging job growth remain my top priorities.”

Front Section, Pages 1 on 07/09/2013

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