HP putting 4,000 contractors in limbo
In an effort to cut costs, Hewlett-Packard plans to furlough 4,000 contract workers this summer in its information technology department and may let many workers go entirely.
HP spokesman Arch Currid said Wednesday that the company plans to have about 4,000 contractors in North America halt work for the three weeks from June 24 through July 12 as the company evaluates projects and determines which efforts should continue. Some contract workers on other projects have already been let go, Currid said.
The moves are separate from the company's plan to cut 15,000 jobs over the coming months but are tied to overall efforts to trim expenses after the company's acquisition of Compaq Computer.
Currid said there is no specific target number of contractors to be cut, but he noted that the three-week furlough is projected to save the company between $15 million and $20 million alone.
Project managers for the contractors were made aware of the coming furlough in early June, although many individual contract workers are just now learning of the plan.
Separately, HP announced Wednesday that it is looking to sell $1.25 billion in five-year and 10-year bonds.
An HP representative said the proceeds from the bond sales will be used for general corporate purposes that could include capital expenditures, merger-related restructuring costs, acquisitions of products and technologies, and funding of dividends or stock repurchases.
The bond offering is being underwritten by Banc of America Securities, Deutsche Bank Securities and JP Morgan.