RealTime IT News

HP Shuts Calif. Plant

As part of an overall cost-reduction strategy, Hewlett-Packard announced plans Friday to shutter its Roseville server and data storage plant in Placer County, Calif.

The 20-year-old plant was a production location for pre-merger HP 9000 systems.

The move is partly an effort to trim HP's overhead and consolidate the manufacture of its HP-UX and Itanium-based servers to its Houston, Texas facility. According to the company, all of the IT systems and processes from Roseville used in product lines will be moved to Houston.

HP's server manufacturing facility in Fremont, Calif. will not be affected, the company said.

Closure of the Roseville plant will include the elimination of 25 jobs, and 475 employees will have the option of relocating to HP's Houston plant.

Manufacturing employees in the Roseville production facility will have the opportunity to interview for jobs in Houston or other parts of HP, said Scott Stallard, Senior VP of business critical systems in a memo to members of the Roseville plant.

Those employees will have job priority over jobs created in Houston and will be offered relocation assistance. However, if no appropriate positions are available, employees will receive the standard HP severance package once the transfer to Houston and other sites is completed.

According to HP representatives, the Roseville plant will remain open for research and development and various types of engineering technology services and will continue to employ the 4,500 employees not affected by the closure of the server and storage unit.

"Current demand and revenue forecasted in the clean room for HP and ESG has not materialized," stated Stallard in the memo. "This makes competitiveness and cost structures an even bigger priority given HP's strategic need for world-class cost structures. "Taking this action streamlines HP's North America supply chain operations, reduces costs significantly and optimizes capacity."

When HP closed its merger with Compaq in May 2002, company representatives announced plans to eliminate or early-retire just under 15,000 jobs. That number was increased later that year to 17,000.

The Roseville job transfers will begin in April, the company said. A phased transition will continue through late summer.