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HP to shutter Calif. plant

In a move to consolidate some of its manufacturing, Hewlett-Packard plans to close a facility that makes servers and storage products, the company says.

Aiming to consolidate some server manufacturing in Houston, Hewlett-Packard plans to close a California plant that makes servers and storage products, CNET News.com has learned.

About 500 employees work at the Roseville, Calif., plant, which makes HP 9000 servers, Intel-based servers and storage gear. Approximately 25 jobs will be cut, the company said. About 475 positions will be shifted to Houston, with workers in Roseville given priority for those openings.

"Streamlining manufacturing will reduce our supply chain costs significantly and enhance HP's ability to deliver greater value to our customers," the company said in a statement provided to CNET News.com. "The Houston factory is on HP's main campus, while Roseville production is housed in leased space."

The company is starting the transition immediately, transferring production to Houston in phases with the first phase set to begin in April and the transition set to be completed later this summer.

HP plans to maintain operations in Roseville, which is near Sacramento, and expects to have 4,000 workers at its campus there after the plant is closed.

The company said there are no "blanket layoffs" associated with the Roseville closing, although HP is cutting thousands of jobs as part of its acquisition of Compaq Computer, with many of the cuts coming in its money-losing enterprise computing unit.

Initially, HP said it planned to cut 15,000 jobs as part of the merger. In September, the computing giant upped the number of planned cuts to 16,800 and said in November that it would trim a further 1,100 jobs.

The 300 HP employees and 200 temporary workers at the Roseville manufacturing plant will have the opportunity to transfer to Houston and will be eligible for relocation assistance, the company said. Temporary workers who transfer to Houston will have the opportunity to become regular employees, it added. HP workers will also be able to maintain their current salary level.

"If affected employees choose not to move, HP will try to identify appropriate openings within HP through the company's existing internal hiring process," the company said in a statement. "If no appropriate positions are available, affected employees will receive the standard HP severance package once the transfer to Houston is completed."