Eveniment

France seeks to refer HP to EU over job cuts-source

Tue Sep 20, 2005 12:49 PM ET

(PARIS, Sept 20 (Reuters) - President Jacques Chirac has asked the French government to refer Hewlett-Packard's (HPQ.N: Quote, Profile, Research) plan to cut jobs in France to the European Commission, a source close to the president said on Tuesday. "On the question of the announcement of the reduction in (the number of) workers at the Hewlett-Packard group, he asked the government to pursue all the efforts underway to respond," the source said.

"Given the impact of this plan throughout Europe, he asked the government to refer it to the European Commission," the source added.

Hewlett-Packard plans to cut 1,240 jobs in France by 2008. The U.S. computer giant is also planning to cut jobs in other European countries.

News of the group's job cuts in France emerged earlier this month and was a blow to Chirac's conservative government, which has made tackling an unemployment rate of almost 10 percent a top priority.

Hewlett-Packard said in July it would slash about 10 percent of its work force in a sweeping move by new Chief Executive Mark Hurd to cut costs by $1.9 billion a year and compete better in cutthroat computer and printer markets.

The cuts are the biggest since former CEO Carly Fiorina slashed roughly 15,000 jobs after HP's $19 billion acquisition of rival Compaq Computer in May 2002.

Analysts have pressed HP for further job cuts or to spin off its lucrative imaging and printing group or divest its personal computing business, where costs are still higher than Dell's