NSAM Staff Report
A key part of the $1 billion investment HP is making to expand its offshore outsourcing capabilities includes a dedicated effort to triple the size of the firm’s San Jose, Costa Rica center from about 2,000 employees now to nearly 6,000 over the next five years, according to informed sources.
This week HP identified six countries-Bulgaria, China, Costa Rica, India, Malaysia and the Philippines-as its global delivery hubs. Executives from HP have made it clear that these destinations are where “clients are headed,” which can be interpreting as meaning that have a viable, long-term presence in stable and low-cost geographies helps balance the company’s delivery portfolio. The re-org includes eliminating about 9,000 positions, mostly in developed markets.
The Costa Rica decision reflects HP’s confidence in the ongoing cultivation of the skilled, tech-savvy labor pool of San Jose. The firm arrived as EDS in 2006 and – although it did execute layoffs during 2008-2009 because of the global economic meltdown – it has return to strength in the last six months.
The decision by HP to bulk up in Costa Rica is not likely to go down well with the call center industry which relies on a stable and available pool of bilingual talent. The fact is most call centers are unable to compete with HP on salaries, coupled with the fact that San Jose also has a robust IT outsourcing industry and it is clear the government will need to continue to act decisively in cultivating a strong base of human capital.
The company, which acquired IT service provide EDS two years ago, maintains that the restructuring will involved a total of 9,000 layoffs over the next two years as well as 6,000 new hires.