HP bears high pension cost

AN EXCEPTIONAL pension cost at the expanding Galway unit of computer giant, Hewlett Packard (HP) put the company into the red last year, new figures show.

Accounts just filed with the Companies Office show that revenues at Hewlett Packard Galway Ltd increased by 19% from $294.9m (€206.35m) to $353m in the 12 months to the end of October last.

The filings show that the company incurred an exceptional $17m cost in relation to additional funding to shore up “a significant deficit” in its pension scheme last year resulting in a pre-tax loss totalling $12.5m.

A $37m cost relating to additional pension funding in 2009 resulted in the company recording a pre- tax loss of $26m that year.

The figures show that the company employed 268 people at the end of October last and in December of last year, HP announced that it was going to create an additional 105 high-tech jobs at its Galway operation.

The jobs, which are based in Ballybrit, are focused on enterprise data architecture, application development and software engineering and testing to support HP’s enterprise business division.

In April, HP Galway announced an additional 50 jobs at is cloud services centre at Ballybrit.

The principal activity of HP Galway concerns the manufacture of computer software and computer documentation and the directors’ report states that the business operation continues to shift towards R&D and service creation activities to off-set the on-going decline in basic manufacturing.

According to the directors’ report, the company exited 2010 “with significant cause for optimism with two major new R&D initiatives launched on the site — significant not just in terms of growth in head-count, but also their long term strategic importance to HP”.

The first relates to the Cloud Services&, while the second cause of optimism is an IT business entitled Unified Product and Service Integration.&

On the company’s principal risks and uncertainties, the directors point to the challenge of maintaining competitiveness in the face of rising energy and labour costs, especially in the context of comparison with other locations around the globe. &

The company, which employs more than 4,000 people here has its Irish headquarters located in Leixlip, Co Kildare.