HP to cut costs by outsourcing more PC manufacturing

In an effort to further curb operational costs, Hewlett-Packard Co. (HP) said Thursday that it is planning to outsource more of its PC manufacturing.

As part of the outsourcing effort, the company said that it is considering a sale of its facility in Isle d'Abeau, France to Sanmina-SCI Corp. Completion of the transaction still requires a definitive agreement and is subject to approval by the workers' council as well as government and regulatory authorities, HP said. The company plans to outsource manufacturing operations in other geographical locations as well.

HP's outsourcing efforts have been in place since 1993, the company said, emphasizing that the decision was not part of its proposed merger with Compaq Computer Corp. Outsourcing will allow HP to establish closer ties with electronic manufacturing service providers and contract manufacturers, which will presumably result in reduced costs, HP said.

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