Hewlett-Packard Ireland plans to diversify its range of services here but is unlikely to meet its target of employing 3,000 people within two years. Launching the company's 1999 Student of the Year award, which recognises excellence in engineering, science and information technology, the company's managing director, Mr David Young, said a more sustainable development cycle was in progress at its European base in Leixlip, Co Kildare because of the effects of a global slowdown in demand.

Some 1,500 people are currently employed there in the manufacture of inkjet products and Mr Young said the company was "pretty comfortable" with the product base.

But the original schedule to employ 3,000 people by 2001 is unlikely to be met as the parent company continues cost-cutting measures in what it calls a "slow-growth environment".

"We still see growth but I would be surprised if we meet that particular level," Mr Young added.

He said the Irish operation "was almost like the IDA" in its role of attracting other operations within the parent group to establish their European base at the Leixlip facility.

He is hopeful it will expand its activities through diversifying into other operations such as electronics and software development. "We expect to be in Ireland for a long time . . . It is an attractive place to do business," he said.

Hewlett-Packard released first quarter results this week, showing earnings per share at 92 cents, 10 cents above Wall Street expectations. There was mixed reaction from analysts.

Morgan Stanley Dean Witter maintained its "neutral" rating, saying Hewlett-Packard was being valued as a growth company in an environment where growth prospects were deteriorating. Credit Suisse First Boston and Lehman Brothers have given "buy" ratings.

Mr Young said the Irish business was "very rock solid". "It did very well."

The company has located its chartered bank at the Leixlip facility, providing leasing services for its European clients. Hewlett-Packard employs 124,600 people worldwide, manufacturing office equipment, including computers, printers and electronic components.

Mr Young cited the relationship with the Government and educational bodies as a key attraction in the State for his operation, which depends on large numbers of technicians.

"We are working closely with the Government and educators to make sure people know what is coming down the road."