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Hewlett-Packard to Shrink Office Space

Alexei Oreskovic

Forging ahead with its companywide restructuring plan, Hewlett-Packard(HPQ) announced Thursday that it will consolidate its sprawling array of worldwide offices.

The move is intended to reduce real estate costs by consolidating several hundred locations into "fewer core sites," H-P said in an announcement. The company did not disclose the amount of savings it expects to reap from the move.

H-P said it will close certain sites or floors in buildings that it owns and relinquish floor space in leased locations.

As of Oct. 31, 2005, H-P owned or leased approximately 65 million square feet of space worldwide, including administrative and manufacturing facilities, according to its annual report.

The real estate consolidation is the latest in a string of actions undertaken by CEO Mark Hurd designed to cut the company's costs and streamline operational efficiencies.

A key aspect of the plan includes layoffs of more than 15,000 H-P employees, or 10% of its workforce. The move is expected to save the company some $2 billion in fiscal 2007.

Shares of H-P were up 1%, or 32 cents, at $33.09 in late trading Thursday.