HP/Compaq Brace Workers For Integration, Layoffs

Memo sets stage for postmerger plans

Fiorina and HP await final approval from shareholders.
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Fiorina and HP await final approval from shareholders.
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An expanded team of 1,200 employees from Hewlett-Packard Co. and Compaq Computer Corp. is finalizing postmerger integration plans even as the two companies await formal notification that HP shareholders have approved their proposed $21 billion merger.

Webb McKinney at HP and Jeff Clarke at Compaq, who are leading the merger integration planning team, last week said in a memo sent to employees of both companies that the process is on track.

"One of our key goals from the start of this process was to make sure the new company would be prepared to open its doors and hit the ground running in the April-May time frame. We are on target to reach this goal," the memo stated.

"Of course, there has been some level of coordination between the two companies, but up to now most of it has been at a fairly high level," said Dwight Davis, an analyst at Boston-based Summit Strategies Inc. "Now comes the tough part, when you have to get down to the nitty-gritty details" of figuring out product line strategies and deciding who stays and who goes, he said.

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Capellas: Rivals are spreading fear, uncertainty, doubt.
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Capellas: Rivals are spreading fear, uncertainty, doubt.
A launch team has been created within the integration team to deal with prelaunch, launch day and postlaunch communications, the HP memo stated. The goal is to make sure that all employees have access to the same information at the same time.

In a separate memo to employees, HP CEO Carly Fiorina and her counterpart at Compaq, Michael Capellas, discussed competitors "who are trying to take advantage of our current situation to spread fear, uncertainty and doubt among our customers."

"Putting anything on hold while we wait for a final proxy vote tabulation is simply not an option," the memo added.

Over the next week, employees from both companies can expect to get details on the new management team's direct reports, organizational structure and the selection process that will be used to fill jobs in the new company, the memo said.

HP and Compaq previously disclosed that 15,000 jobs will be eliminated.

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