HP Inc, which employs some 500 people at Leixlip, Co Kildare, is a giant – and profitable – US company, which came into being after the former Hewlett Packard split in two in 2015. But the markets in which it operates – PCs and printers – are under pressure and this looks set to lead to bad news for the company's Irish operations, when senior management brief staff today.
The split of Hewlett Packard led to the creation of HP Inc, which took on the consumer business and also Hewlett Packard Enterprises, which serves business customers in areas such as enterprise hardware and cloud computing. Investors were told the split would allow the two separate companies to concentrate more effectively on two separate businesses.
But rationalisation and cost-cutting was also part of the plan and after a round of initial cuts, HP Inc announced last October that 3,000 to 4,000 jobs were to be cut from its 50,000 worldwide staff between 2017 and 2019. It appears that the plant in Dublin is now at risk as a result of this, with sources suggesting that the company is rationalising a significant part of its operation back to the US. A request for information from the company had not been responded to by late yesterday.
Close attention will be paid to the terms of the announcement and whether the approach of new US president Donald Trump to encouraging companies to invest in the US has had any impact on the decision. Sources said that two of the company's most senior executives have travelled from its headquarters in Palo Alto, California to brief staff today. Hewlett Packard Enterprises also has an operation in Ireland, which is not affected by the latest developments.
HP Inc is operating in the PC and printer business, both under serious pressure. To respond, it has developed a new range of laptops and is investing heavily in 3D printing, seen as a major source of future growth. It also bought Samsung Electronics’ printer business This has helped to stabilise the company’s financial position. For 2016 it reported net revenues of $48.2 billion and net earnings, or profits of $2.7 billion from continuing operations. While revenue and profit were both down on 2015, the fourth-quarter results showed revenues ahead of the same period the previous year, and earnings ahead of forecast.
Financial performance
Despite this stabilisation in its financial performance, HP Inc has decided to push ahead with its restructuring, which is expected to deliver savings of $200 million to $300 million a year by 2020. The fears now are that the Leixlip operation will fall victim to this restructuring, leading to one of the most significant job loss announcements of recent years. The Leixlip area has a string of other high profile employers – notably
Intel
– and special schemes are normally put in place when major closures are announced to try to match those losing their jobs with vacancies. However, there will be no disguising the major blow to those involved and to the Leixlip area. The last few years have seen a strong inflow of jobs from
IDA Ireland
companies – and in turn this has given a strong boost to economic growth. But news of major job losses also highlights the exposure sometimes created when large numbers are employed in major firms.
