Update: Hewlett-Packard to Lay Off 500 in Conway

by Luke Jones and Lance Turner  on Monday, Jul. 8, 2013 3:33 pm  

A bank of workstations as seen from the stairwell in Hewlett-Packard's center in Conway. The photo was taken in early 2010, before workers moved into the $28 million facility at the Meadows Office & Technology Park in Conway. (Photo by Mike Pirnique)

Hewlett-Packard of Palo Alto, Calif., the computer and information technology services company that has struggled as PC sales have declined, said Monday that it is laying off 500 people at its services center in Conway.

In a statement, HP said the move is part of a restructuring process announced in May 2012 "designed to simplify business processes, advance innovation and deliver better results for our customers, employees and shareholders." In September, the company said it might cut as many 29,000 workers worldwide. 

Sarah Pompei, an HP spokeswoman, told Arkansas Business that the employees who will lose their jobs in Conway are in HP's customer support specialist and contact center footprint. She said HP will continue to maintain a presence at its facility in Conway. She said the company will help laid off workers transition to new jobs.

"There will be no disruption in any of our services," the statement said. "Customers will still have access to HP's full portfolio of services with the same level of quality."

Brad Lacy, president of the Conway Regional Chamber of Commerce, told Arkansas Business the layoffs were unexpected. 

"We were a little surprised," he said.

HP doesn't release employment numbers at specific locations, but Lacy said the chamber estimated the company to have employed around 1,400 before the layoffs. He said he'll be working with the company to try to find new employment for the workers.

"We need to get with the folks at HP to see how they handle those things internally," Lacy said. "The next few days we'll be contacting employers that may have similar needs for the skill set that you have with those folks. I've been on the phone a couple of times today already, but 500 is a lot to absorb. That's a lot of people."

Video: Brad Lacy talks to THV 11 News about the challenges of replacing 500 jobs in Conway.

The publicly traded company announced the customer service and technical support center in 2008 with great fanfare at a news conference attended by Gov. Mike Beebe and an HP executive. It opened the 150,000-SF, $28 million center at the Meadows Office & Technology Park in Conway in 2010, expecting to employ 1,200 people with average salaries of about $40,000.

At the time, Arkansas officials said landing the project would change people's perceptions about Arkansas.

"It ... will bring high-tech, high-paying jobs to the state," Maria Haley, the former state economic development director who died in 2011, said at the time. "And hopefully, it will bring back some of the people who left the state because they couldn't find quality jobs. And I also think that since the state was able to land this type of particular facility, [it] gives the world a different image" of Arkansas.

The state and city devoted millions of dollars in incentives to the project. Arkansas provided $10 million from the Governor's Quick Action Closing Fund for infrastructure, and the Conway Development Corp. built the $28 million facility to the company's specifications. Hewlett-Packard has been leasing the building from the Conway Development Corporation. Conway also agreed to spend $2.2 million to prepare the site.

On Monday, Joe Holmes of the Arkansas Economic Development Commission told the Arkansas Times that there are clawbacks on the Quick Action Closing Fund money.

"Exactly how much we don't know but will be meeting with the company the next few weeks to hammer that out," he said. "It will be based on totals of people employed, payroll, length of time employed etc. I will say they have been current on all agreements up until today."

Holmes said HP informed AEDC "this morning" that it planned to lay off about "half of its workforce."

On Monday, U.S. Rep. Tim Griffin, R-Ark., called news of the layoffs "terrible and heartbreaking."  

"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," he said.  

HP, which makes personal computers and printers and offers information technology services to business, has seen its value drop nearly 80 percent since 2010 as consumers have moved away from PCs and toward mobile devices, including Apple Inc.'s iPad.

The company has weathered high-profile CEO changes, an aborted plan to exit or spin off its PC business and a failed effort to craft its own mobile ecosystem system based on Palm's webOS, which it acquired in 2010 as part of its $1.2 billion purchase of Palm Inc. 

Company shares (Nasdaq: HPQ) peaked at $54.75 April 2010 and dropped to a low of $11.35 in November. On Monday, shares closed at $25.17, down 1.6 percent.

 

 

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