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Hewlett-Packard Company : H-P to Cut 850 Employees, Close Germany Site

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02/01/2013 | 05:15pm CEST

Hewlett-Packard Co. (HPQ) will close its site in Ruesselsheim, Germany, by the end of October and lay off about 850 employees--or 8.5% of its workforce in the country--as part of a previously announced broader restructuring effort.

"The changes we are announcing in Germany today are a necessary part of our commitment to deliver our long-term operating model," said Mike Nefkens, executive vice president of H-P Enterprise Services.

The Palo Alto, Calif., technology giant is in the midst of a multiyear turnaround as the personal-computer market faces growing pressure from mobile devices, intense price competition and economic uncertainty in emerging markets.

H-P has also faced falling interest in printers among consumers, who have shifted from relying on paper to using their mobile devices instead. Servers have seen their prices fall along with desktop and laptop computers, taking margins along with them.

In March, the company unveiled a sweeping reorganization plan that would fold its once-dominant printing business into its PC-making personal-systems group and centralize many other functions. It later disclosed plans to lay off 27,000 workers. Though the company has insisted its computer, software, services and printer businesses can be reinvigorated, it has said it expects revenue for the current fiscal year to fall in each of its largest businesses.

The latest restructuring affects the H-P enterprise services business in Germany, and won't affect any of the company's other major sites in the country. H-P will continue to employ about 10,000 people in Germany.

As part of the upcoming closure of the Ruesselsheim site, about 850 positions will be eliminated. H-P said employees affected by the changes will have the opportunity to apply for open positions at its other sites. It said the roughly 250 employees that remain at the site will have the opportunity to transfer to H-P partners or clients.

In November, H-P reported a nearly $7 billion loss for its fourth-quarter, writing down software unit Autonomy, which it acquired just over a year ago, citing accounting irregularities, among other reasons.

Shares of H-P were up 15 cents to $16.66 in recent trading. The stock has fallen 42% in the past 12 months.

Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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