The plant is used for assembling and packaging PCs, servers and iPaq handheld computers ordered through Compaq's Web site. The plant is one of four in the US responsible for handling online orders.
"It's the smallest of our four Compaq Direct facilities," said Roger Frizzell, an HP spokesman. "It really didn't have the sufficient scale to achieve the level of cost effectiveness... without more investment."
The closure is expected to be completed by the end of October, Frizzell said. Employees will be offered alternative jobs at HP and will receive a minimum of 12 weeks severance pay, the company said.
The manufacturing and assembly work handled by the plant will be transferred to the three other Compaq Direct facilities.