HP Boss Denies Irish Job Loss Rumours

by Jason Gorringe, Tax-News.com, London

10 May 2002

Compaq and Hewlett-Packard employ around 4,500 staff at their Irish operations, and they are understandably worried about the prospect of redundancies. The companies have talked about a total of 15,000 job losses worldwide. But staff will have to wait months before an integration team makes its recommendations to the board of the merged companies: Hewlett-Packard said this week it would not complete the proposed 15,000 redundancies for nine months.

In an interview with the Irish Times, Martin Murphy, Hewlett-Packard's general manager for Ireland said talk of 400 job losses was 'wild speculation': 'Job losses should not be a short-term concern for employees here as there are also a lot of unique operations which Hewlett-Packard has in Ireland,' said Mr Murphy. 'What we have put in place this week is an integration team for Ireland. They will spend the next few months looking at our whole footprint in Ireland.'

The two companies' operations in Ireland may be safer than some from job cuts, because they act as finance hubs for subsidiaries in Europe, the Middle East and Africa (EMEA). Ireland is a tax-efficient place in which to base financing and holding companies, which can use the country's EU status and low tax rates to achieve a very good after-tax rate of return on capital.

In the next few months, Hewlett-Packard would consolidate its services division at its Leixlip, Co Kildare campus enabling it to give up a lease on a building in Blackrock, in Dublin, said Mr Murphy. Compaq's services division is on two separate Dublin sites at Clonskeagh and North Circular Road. Mr Murphy said the company expected to exceed its financial targets in Ireland this year.

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