Posted 7/9/2013 07:19 am
Updated 5 months ago
Hewlett-Packard Co. announced Monday it will lay off 500 workers from a customer support center in Conway, dealing the state a second blow in as many weeks from once-promising employers whose Arkansas business models didn't work as expected.
Palo Alto, Calif.-based HP is to keep the center open. The company opened the campus in 2010 with 600 workers, with the expectation of twice that many people working at the campus.
But HP announced last year that it would work to "simplify business processes" and the layoffs came as part of that program, HP spokeswoman Sarah Pompei said.
To help attract HP to Arkansas, Gov. Mike Beebe approved spending $10 million from the Governor's Quick Action Closing Fund to help pay for infrastructure for HP's building.
Beebe spokesman Matt DeCample said the governor met with company officials Monday.
"They were very up front about their willingness to work with (the Arkansas Economic Development Commission) to return some incentives," DeCample said.
On June 28, Nordex USA announced it would end production of wind turbines at its factory in Jonesboro. The state has promoted development of wind energy-related companies as a complement to technology-based jobs.
AEDC spokesman Joe Holmes said HP will continue to employ "several hundred" people at the Conway site.
"They have been and continue to be a great company and a strong partner in maintaining good jobs here," Holmes said.
Holmes said that until Monday, HP had surpassed its obligations in qualifying for state incentives.
"We will be working with HP over the next few weeks to determine any funds owed with respect to the Quick Action Closing Fund," Holmes said.
Other incentives were performance-based, including a cash rebate equal to five percent of payroll for 10 years and a 1 percent income tax credit for five years for payroll for new jobs.
The company was also eligible to receive sales and use tax refund for building materials and certain machinery.
DeCample said the state still has a growing reputation as a place to bring technology-based jobs.
"It's a tough hit for any community and for the state. We've built a reputation for Conway in previous years of them being a destination for technology jobs and that's not going to change," DeCample said.
Hewlett-Packard said it would provide assistance to employees who are losing their jobs, and DeCample said there are state resources that will be available to the workers.
When the campus opened, HP's then-CEO and chairman Mark Hurd said the company chose Conway from 26 different U.S. metropolitan areas. He said the University of Central Arkansas and Hendrix College, both in Conway, could supply a stream of trained workers.
The Nordex plant opened with the prospect of employing up to 750 people. But in last month's announcement, the company said 40 workers would lose their jobs. The firm will keep sales and service employees.
Nordex said the lack of a long-term tax incentive for generators of wind energy is holding back the industry from blossoming in the U.S.
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