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June 22, 2005

Direct payoff, direct layoffs

HP has finally realized a solid return from its Compaq merger right here in Texas. This month HP closed on a sale of more than 462 acres of "excess" land in Northwest Houston, a chunk of real estate that was linked to a Compaq facility in that city. According to a story in the Houston Business Journal, the land will become "a new lifestyle center on the former Hewlett-Packard Co. property in far-flung northwest Houston."

Just a week earlier, the fallout of 3,000 HP layoffs trickled through the 3000 community. One engineer who'd been "affected" posted his availability on a technical mailing list. HP said earlier this year that it would be adjusting its headcount in the Enterprise Storage and Systems group during the second and third quarters, a result of intense competition. The vendor has earmarked $236 million for severance pay in the last two quarters, the kind of harsh trimming that CEO Mark Hurd has done before, at his old job at NCR.

Losing a job at HP is far from the rare thing it was 10 or 15 years ago. Back then, the vendor was so circumspect about layoffs that it used alternative words, like being excessed. The headcount for HP's 3000 operations has always been a closely-held figure, but few of us figure it to be in triple digits today. Prior HP layoffs during 2003 and back in 2001 trimmed the 3000 jobs, along with others.

The company now calls the layoffs by their correct name, so investors and financial analysts get the message. Good talent has always flowed out of HP and into the 3000-related third-party companies. Layoffs hasten this outward flow of experience, skills so rare they can qualify as priceless.

As for the land selloff, its net return to HP is still under wraps. HP started on a path of selling its buildings and land several years ago, a strategy that has helped a bottom line under constant pressure in the commodity markets the vendor has embraced. The vendor has sold a total of 632 acres of property in Houston since 2004. The developer plans for 145 acres of park land, as well as an 84-acre lifestyle center including retail, entertainment, dining and recreation facilities. The developer is spending $1 billion to create Vintage Park, to open in 2007, including a 650,000-square-foot lifestyle center on 84 acres on the southeast corner of Louetta Road and State Highway 249.

06:24 AM in News Outta HP | Permalink

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