HP to shutter Germany site affecting 1,100 employees

Hewlett-Packard is planning to close a site in Germany as part of its multi-year restructuring plan announced last year. The world’s largest PC maker, plans to shutter the Ruesselsheim site by the end of October, Reuters reported.

The move will affect 1,100 employees and close the site which is located southwest of Frankfurt. Around 850 jobs would be cut, but the remaining 250 employees may be able to transfer to HP partners or clients.

HP, based in California, will be shuttering its Ruesselsheim unit

The latest move in restructuring HP’s enterprise services business will not affect the company’s other major sites in Germany. HP will continue to employ about 10,000 people in the country that is Europe’s largest economy. The Ruesselsheim unit provides enterprise services such as IT consulting and data-center management, but the closing of the site sent HP’s shares up by 16 cents at $16.67 in morning trading.

More from News & Analysis

What is the US HIRE Bill and why is India’s $250-billion IT sector worried? Is the internet dead? What's this theory that OpenAI's Sam Altman says might be true?

HP announced in May of last year that it was planning to lay off 25,000 employees over two years to trigger growth, and in the process, save up to $3.5 billion annually. Then in September, the company decided to increase the tally of employees who would be affected by the job slash. The company had faced a 31 percent decline in second-quarter profit in 2012, and a 3 percent decline in revenue. HP employs more than 300,000 people globally and it began a multi-year restructuring programme focused on services targeted at corporations.

However, as we had reported at the time, this restructuring will not affect the company’s India operations. President and CEO, Meg Whitman, who has been at the helm since September 2011, had said at the time, “We are not reducing our workforce in India. We have announced a global workforce reduction, but India will stay largely intact, because we not only have all our business units here, but also our R&D and back office. We are focused on keeping our workforce here, and I think over time, probably increase the workforce."

Bloomberg reports that Volker Stichter, head of the Ruesselsheim works council, said the workers affected are indeed part of the earlier announced programme. “It’s not like we’re sitting on our hands here,” Stichter said. He added that the cuts amount to a quarter of HP’s enterprise-services workforce in Germany. “I’m not sure we can adequately handle our customers after this.”