Despite the crimp put on its business by the memory chip crisis (CI No 950), Hewlett-Packard Co is in expansion mode, the company told analysts at its New York briefing this week. President John Young said that the company planned to make capital expenditures of $600m this year, and to increase its US workforce by between 600 and 800 people – including additional posts in manufacturing. The company currently has 83,000 employees worldwide. Research and development expenditure however declined in the six months to April 30, falling 11.5% to $482m compared with the same period last year – and the company hopes to reduce the amount it spends still further but there are an awful lot of pressures still out there and more things to do. Underlining the slackness of the US market, foreign business currently accounts for 53% of the total, and the company says it suffered from a slowing of demand in the US in the second quarter, and John Young says that third quarter orders for the period to July 31 don’t look like matching the record $1,190m achieved in the same period a year ago. The company is hoping to expand its US business by offering turnkey networked systems complete with applications software loaded and tested for the things are shipped, and looks to this to reduce monthly support costs by more than half. On the chip shortage, the company is extremely gloomy, saying that it sees the problem getting worse in the second half: the company had been hoping that supply would improve by mid-year, but instead, it was getting much tighter. As a result, it has had to put off the 80386 model in the Vectra personal computer family, planned for launch in March, at least until July, and possibly later than that.
