SINGAPORE--Hewlett-Packard Co could lay off hundreds of workers from its Singapore operations, sources within the company said.
They said yesterday that around 10 percent of its workforce in the republic could be given pink slips. HP currently employs more than 6,000 employees here. "Affected employees will be issued (termination) letters starting tomorrow," they said.
"Manufacturing and marketing will be the hardest hit...there will also be cuts from the enterprise sales division," sources said.
HP opened its 10,000 square feet inkjet wafer fabrication plant here at the cost of US$100 million to produce microchips used in its inkjet cartridges worldwide. This was its second such facility after establishing a 16,000 square feet thinfilm wafer fab in 1991.
Sources said that supervisors at HP's Singapore operations started speaking to affected employees since 5.30pm this evening. However, HP Asia Pacific spokesperson Cecilia Pang denied that the exercise had begun.
In addition, sources said about 30 out of approximately 400 employees in Malaysia could possibly be laid off, with most staff cuts coming from the marketing and administration departments.
Pang refused to confirm or deny the number of job cuts in Singapore and Malaysia, reiterating that HP will not release detailed figures. "I'm not confirming any country-by-country figures because of legal and other reasons," she said.
The computer and printer maker currently employs about 14,000 employees in Asia Pacific (including Japan). Its business divisions in the region include business customer sales, consumer business and network storage and services.
Pang had earlier indicated that the company would start its restructuring process in Singapore this week. "The implementation of the job cuts will vary in different countries because of various local labor laws."
It is learnt that HP is aggressively sourcing for positions outside the company to help the affected employees.
The cuts in Singapore is part of a plan announced in July to eliminate about 6,000 jobs worldwide, which would result in an annualized savings of about US$500 million. HP said in a statement last week that the vast majority of workers affected would leave the company by the end of October.
The decision to slash workers in Asia comes more than month after it asked employees to voluntarily take a pay cut, vacation or a combination of both to help cut cost.
In June, Pang said that the company was taking both short- and long-term measures on a business-by-business basis to reduce expenses and generate revenue near term, as well as to create more competitive cost structures for the long run.
Short-term measures include asking employees to take additional days off and travel and hiring restrictions while long-term measures would comprise restructuring initiatives the company had already undertaken such as "increasing management span of control, more aggressive performance management and marketing restructuring to eliminate redundancies."
Sources said that HP has left no stone unturned in its bid to trim costs and run a leaner organization to the extent that "even cellphone subsidies of marketing communications executives in Singapore was revoked."
Meanwhile, it is uncertain if HP would proceed with its plan to recruit an addtional 1,000 consultants and technical support staff in Asia Pacific (including Japan) to bulk up its IT services unit. In May, Cheah Kean Huat, HP Asia Pacific vice president and general manager (services) said that he expects the number of consultants to hit 4,000 by October 2003 as part of the company's effort to boost its consulting business.
HP employs about 88,000 employees worldwide. It established its Singapore operations in 1970.