HP plans to shut down its Cupertino operation and move its Cupertino employees to Palo Alto, according to a company memo obtained by the website VentureBeat.
The shift could bring sales-tax revenue to Palo Alto, along with the workers, according to a city official.
In the memo, addressed to its Bay Area workers, the Palo Alto-based computer giant announced that it seeks to achieve better efficiencies and use space more effectively by closing its Cupertino facility and shifting operations to Palo Alto, a move that it expects to complete in two years.
The move refers to a recent analysis that "shows current utilization of both sites is low, with only about 60 percent of workspaces in regular use." The company's goal is to raise that number to 90 percent.
The shift in operations is part of the company's broad "global workplace initiative," which according to a company spokesperson "is one of the many ways we are executing on our strategy to improve efficiency across the country."
"This effort allows HP to better use space, continue to reduce our carbon footprint and provide employees with a more collaborative work environment," the HP spokesperson said.
HP did not disclose how many employees would be relocating as part of this effort.
Palo Alto Deputy City Manager Steve Emslie, who heads the city's Office of Economic Development, said the company plans to renovate vacant space on its existing campus.
The company was founded in 1939 by Stanford University graduates William Hewlett and David Packard. Initially housed in a one-car garage on Addison Avenue, the company ultimately set up its headquarters on Page Mill Road and grew into one of the world's largest computer companies.
Emslie hailed the move as great news because it essentially ensures that one of the Palo Alto's biggest and most prestigious companies will remain in the city. Emslie said the move could also bring sales-tax revenues to the city and, potentially, higher property taxes because HP's upgrades could require a reassessment.
HP has been one of Cupertino's top 40 sales-tax producers, according to the City of Cupertino website.
Aarti Shrivastava, Cupertino's director of community development, said she would not divulge the specific economic impact that HP has had on the city.
"We're sorry to be losing an important corporate tenant," she said, adding, "This does open up some opportunities."
The company's plans, according to the HP memo, include shifting its Customer Briefing Center to Palo Alto and making other upgrades to its existing facilities in Palo Alto. These include fully upgrading one of its Palo Alto buildings and making "improvements" to six other buildings.
"Older infrastructure will be replaced with new, more efficient technology, using green solutions such as energy-efficient lighting and equipment and sustainable materials," the memo stated.