HP/COMPAQ: HP, Compaq beef up integration team

An expanded team of 1,200 employees from Hewlett-Packard Co. and Compaq Computer Corp. are finalizing postmerger integration plans, even as both companies await notification of formal HP shareholder approval of their proposed US$21 billion merger.

A memo to employees of both companies was sent out today by Webb McKinney of HP and Jeff Clarke of Compaq, who are leading the merger integration planning team.

"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.

HP on March 19 declared that the acquisition of Compaq had been approved by shareholders, although official word on the results isn't expected for a few weeks. The independent vote-counting firm IVS Associates Inc. in Newark, Delaware, will certify the election results. Compaq shareholders easily approved the deal last Wednesday.

"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 making decisions on who stays and who goes, he said.

As part of its acquisition of Compaq, HP said it will lay off about 15,000 employees worldwide in the next six to nine months. The layoffs will come from both companies.

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. The integration team has grown by 300 from the 900 employees of HP and Compaq who have been working on the integration for more than six months.

Soon after the formal closing of the deal, employees, customers and HP business partners will receive letters from HP Chief Executive Officer Carly Fiorina and her counterpart at Compaq, Michael Capellas, outlining details of the integrations.

Also being sent out as part of the communications effort will be presentations outlining product road maps and marketing and brand strategies, as well as service and support, under a merged organization, the memo said. Employees will also be provided with details on organizational structure and employee selection processes, among other things.

At the same time, the memo cautioned employees not to expect all aspects related to the integration to be finalized on closing day.

"Our intent is to announce decisions around job selection and reduction as soon as we can. But those decisions and announcements will be driven by the strategies and operating plans of each business and implemented in accordance with relevant national and local laws," the memo noted.

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