HP’s Restructuring Will Benefit Rather Than Hurt Latin America

HP's restructuring moves in Latin America may not spell doom for the region.

Hewlett-Packard’s restructuring program is slated to be completed sometime next week, but it is becoming increasingly less likely that the company will lay off any of its employees in Latin America. Countries like Costa Rica, where HP has employed about 6,000 people, will likely gain from the restructuring rather than lose.

Ever since HP announced plans to remove nearly 30,000 employs as part of its restructuring, its executives have indicated that they expect to take on more employees in emerging countries, including India, Costa Rica, Brazil and Mexico.

“Emerging markets tend to be faster growth markets than the United States,” Meg Whitman, Hewlett-Packard’s CEO, said in an interview with Bloomberg. “We need to have people where we are going to grow.”

This came weeks after Maria Luisa Gonzalez, HP Costa Rica human resources manager, dispelled the confusion in her conversation with Amelia Rueda that the company has no immediate plans to reduce its workforce in the Central American country.

According to the Times of India, HP will hire 1,400 people in India. But there are no reports as to how many people HP will hire in Latin American countries. The Silicon Valley giant gets about 65 percent of its sales overseas. Moreover, several of its research labs are located in emerging countries including Costa Rica and India.

On 1 November, HP will split into two separate publicly traded companies: HP Enterprises and HP Inc.  Hewlett Packard Enterprise will trade under the ticker symbol “HPE”.

The layoff in developed market, according to the company’s press release, can help it save approximately $2.6 billion over the next three years, beginning in fiscal 2016.

HP has been operating in Costa Rica since the past 13 years. Rising wage cost might be hurting the profits of IT outsourcing firms, but Costa Rica offers other benefits that offshore locations like India cannot offer.

In a 2010 interview with Nearshore Americas, Jeff Womack, VP of Best Shore Enablement within HP’s Enterprise Services group, stated that ‘the increasing amount of client demand in the Americas for time-zone-approximate support’ was driving the company’s expansion in Costa Rica.

Moreover, HP’s staff in Costa Rica is handling some key jobs for the company. They are also responsible for managing next-generation technologies like cloud-based services.

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