Hewlett-Packard Plans More Shutdowns
Hewlett-Packard said Monday that it will make good on its threat to shut down factories and some offices and briefly idle 45,000 U.S. employees during the Thanksgiving and Christmas holiday weeks, a sign that it still considers the computer industry’s slump to be deeply entrenched.
“We may be seeing the beginning of an upturn in the United States, but international orders remain quite weak,” said Dean O. Morton, executive vice president. “Our business picture remains about the same as it has been.”
Hewlett-Packard, a $6-billion computer manufacturer that specializes in sophisticated machines for engineering and scientific uses, has fared relatively well during the long slump, due in part to previous cutbacks.
In the latest quarter, sales were flat at $1.3 billion and earnings dipped 13% to $117 million. While the company has avoided the sharp deterioration or red ink that other computer makers have suffered, its normal 25% annual growth has evaporated.
In addition to the temporary layoffs, Hewlett-Packard, based in Palo Alto, said it will tighten the hiring process by requiring approval of the company’s full executive committee for any employment increases. That moves such decisions up one layer of management.
The plant closings effectively extend the periodic, wide-ranging shutdowns of all non-sales facilities that were announced in July. At the time, Hewlett-Packard said that it would implement similar actions over the holidays if the market didn’t improve.
All U.S. plants will be closed for the weeks of Thanksgiving and Christmas, and two days each week will be days off without pay. The other three days each week will be regular holidays or forced “vacation.” Overseas operations will be “asked to follow the spirit of the U.S. plan,” the company said.
“Overall business levels do not support the expense of a full work schedule,” Morton said.
Company officials said no hiring freeze has been ordered or employment target set. Rather, hiring will be more strictly monitored, a spokeswoman said. Hewlett-Packard employs about 85,000 worldwide and 26,000 in California, including about 3,000 in Southern California.