Company representatives refuse to provide specifics on potential cuts

By SEAN WOLFE and BENNETT HALL
Corvallis Gazette-Times

CORVALLIS — The watchword is "transformation."

That's Hewlett-Packard's term for how it will shift its operations to better meet increasing competition and declining growth rate in revenues. The strategy is to emphasize digital photography and home entertainment for the consumer market and push color printing for businesses.

What that will mean for headcounts at HP's sprawling Corvallis campus remains unclear, but Hewlett-Packard employees and community leaders say they've been told to expect big changes.

In November, HP announced plans to reorganize the business and slash jobs in the coming fiscal year. Asked what sorts of cuts to expect in Corvallis, where the giant electronics company employs about 4,300 people, HP representatives have repeatedly declined to provide specifics.

On Jan. 14, HP merged its imaging and printing group, the division most Corvallis employees work for, with its personal systems group, which makes desktop computers, under Vyomesh Joshi, the printing division's longtime leader. In a video presentation simulcast companywide to employees of the new imaging and personal systems group on Jan. 19, Joshi acknowledged that HP faces competition on multiple fronts.

Low-cost competitors include Lexmark and Dell, the computer giant whose CEO, Kevin Rollins, has vowed to hollow out HP's industry-leading inkjet printing business.

The presentation also acknowledged that ink cartridge refillers are eating into the business of selling new printer cartridges, the primary source of profit in the inkjet business, much as razor blades are to razors.

In a Q&A-style fact sheet issued the same day, the company acknowledged that the "transformation" will impact people and jobs but didn't specify how many employees will be cut or in what divisions. The timing of the "work force realignment," according to the fact sheet, will likely be the third quarter of this year, following the finalization of a new leadership framework.

While declining to say how the Corvallis campus might be impacted, Brigida Bergkamp, a spokeswoman in the company's Silicon Valley headquarters, said the personnel changes were necessary for the company to remain competitive. At the same time, she predicted that overall employee numbers in the imaging and personal systems group would remain about where they are today.

"For a business that wants to continue to lead, it's really essential that you're flexible," Bergkamp said. "This work force adjustment includes cuts as well as hiring."

Bergkamp said no number or time frame had been established for job cuts within the imaging and personal systems group. She added that affected employees would receive plenty of notice before their jobs end and that HP would provide assistance for workers applying for new jobs either within or outside the company.

Many Corvallis employees have been told they'll need to reapply for their current jobs or apply for other positions that call for their skill sets. For employees looking to upgrade their skills to qualify for new jobs that become available during the transition, the fact sheet says HP will offer retraining programs "based on business need" but warns that not all displaced workers will be eligible.

People who work at the Corvallis site say managers have told them to expect job cuts of about 20 percent over the next year or so. If the official tally of 4,300 employees for the Corvallis site is correct, cuts of that depth would mean a loss of about 860 jobs, reducing employee headcount to around 3,440 — about half the number HP Corvallis employed in its mid-90s heyday.

Some community leaders, meanwhile, say they've been briefed to expect lesser cutbacks — in the range of 5 percent or about 200 jobs.

Bergkamp declined to comment on the validity of either number, dismissing the estimates of possible staffing reductions as "speculation."

Some HP employees in Corvallis — who asked not to be named for fear of losing their jobs — also said they've been told that the plant would be phasing out its inkjet production division. It's been years since the Corvallis site was a high-volume producer of the highly lucrative computer printer cartridges, but the assembly area had remained in use as a test bed. Production lines for new cartridge models would be set up and debugged in Corvallis, then exported to high-volume production centers in Ireland, Singapore and Puerto Rico.

But they're also hearing talk of proposals for leasing out unused space in Hewlett-Packard's 11-building industrial campus, where part of one building has already been donated as temporary quarters for the Oregon Nanoscience and Microtechnologies Institute. That raises the possibility that the highly insular HP compound could someday transition into a multitenant industrial park, with Hewlett-Packard as the anchor.

Bergkamp said she was unaware of any such discussion but added that the industrial park scenario was not out of the question.

"We certainly look at our real estate portfolio and what are areas where we can have efficiencies," she said.

Despite the ongoing climate of uncertainty at the Corvallis site, one HP employee, who asked not to be named, said Joshi's presentation came as something of a relief.

"We've been getting prepped and told about this since November," the employee said.

Dealing with constant job insecurity is nothing new for tech workers, the employee added, especially industry veterans from the Bay Area, where it's not unusal to change jobs every couple of years.

"The only thing that makes people in Corvallis nervous is there aren't that many places to go. That's very disruptive to family."