Hewlett-Packard fell well short of meeting hiring goals set out in an agreement to receive $2.2 million in incentives to locate a customer service center in Rio Rancho, even before Monday’s announcement that 200 jobs will be lost there.
Under the agreement, the company committed to have 1,350 employees at the 218,000-square-foot facility by the end of 2012, or pay the city a penalty under the incentives clawback provision.
The city has yet to determine what HP might owe under the clawback, and likely won’t until late this year because the agreement gives the company until December 2013 to submit appropriate reports.
The incentives included: a 50-year lease of 17 acres of city land appraised at $595,203 to HP for $1 a year; waivers for impact and other fees; and reimbursement of grading costs.
The company employed 860 people on Monday when it notified employees that 200 jobs will be cut by Oct. 31 in Rio Rancho as part of a worldwide restructuring.
“It is a complicated formula, but it’s not going to be millions of dollars,” said Rio Rancho Mayor Tom Swisstack.
Figures provided by the city in August showed HP would have paid a penalty of about $16,500 if it missed the 2012 hiring goal by 10 percent.
“I can’t disclose any specifics,” HP spokesman Michael Thacker told the Journal. “I can just say we are abiding by the terms of that contract and we are continuing to work with the mayor’s office.”
Swisstack told the Journal on Tuesday that employment at the center, which opened in December 2009, peaked at about 1,150 in 2011.
The Rio Rancho center experienced some layoffs last summer, not long after HP announced it would be slashing 8 percent of its 350,000 employees worldwide. Some former employee reports suggested dozens were laid off in Rio Rancho but HP did not offer details. Swisstack said Monday’s layoffs would be in addition to whatever number of jobs were lost last summer.
HP wasn’t much more forthcoming this week.
“In May 2012, HP announced a restructuring plan designed to simplify business processes, accelerate innovation and deliver better results for customers, employees and stockholders,” the company said in a statement. “As part of that plan and in an effort to drive efficiencies, it was announced on Jan. 7 that all Customer Solution Center support currently delivered from Rio Rancho will be transitioned to Alpharetta, Ga.”
Thacker said the timing of the cuts announced Monday had nothing to do with 2012 employment levels or trying to minimize clawback penalties.
The affected workers provide support to HP’s enterprise group, which is part of the company that sells servers, storage, networking and like, “not necessarily consumer products,” he said.
Swisstack, who called HP a good corporate member of the community, said the employees hold highly technical positions and make an average of $50,000 a year. He said the city would work with the state’s Workforce Solutions to see if a job fair could be held to help find them new jobs.
Swisstack said Monday’s announcement caught him off guard.
“I was very surprised. I was very saddened,” he said. “I never want to see people losing their jobs anytime, but in particular, during this tough economic time.”
— This article appeared on page A1 of the Albuquerque Journal