HP/COMPAQ: Staff brace for wave of sackings

HP/COMPAQ: Staff brace for wave of sackings

Hewlett-Packard and Compaq will slash a combined total of 15,000 jobs as the merged entity attempts to wipe $4.81 billion ($US2.5 billion) in costs from its balance sheet, officials said last week.

According to HP chief financial officer Robert Wayman, 75 per cent of the $4.81 billion cost savings will come from job cuts, with procurement savings making up the balance.

However, HP officials declined to offer any details about whether the job cuts would occur geographically or departmentally, or when they were expected to take effect.

Combined, the companies have more than 145,000 people in about 160 countries. Compaq has an estimated 2500 staff in Australia, with an additional 400 in New Zealand, while HP has a total of 1300 across both countries.

Already the daunting task of unifying the two workforces has exposed rifts, with HP Australia attempting to distance itself from the publicly released figure of 15,000 lay-offs, saying it had been issued by Compaq CEO Michael Capellas and was not substantiated by HP.

"No such statement has been made by HP as far as I'm aware," a HP spokesperson said.

HP and Compaq officials also refused to confirm or deny allegations that redundancies were being carried out as early as Wednesday, last week.

Compaq's Capellas and HP CEO and chairwoman Carly Fiorina have frequently referred to the extensive overlap in their companies' strategies. Speculation suggests this will also equate to extensive overlaps in their combined workforce, particularly with the elimination of product lines.

Prior to the merger announcement, up to 17,500 HP and Compaq jobs worldwide were slated to go. Gartner believes the cost efficiencies in manufacturing and marketing could lead to further significant cuts worldwide in the medium term. In the Asia-Pacific region, this could equate to several thousand job losses.

Staff caught in the crossfire

Compaq Australia

Late 2000 -- Local Compaq CEO Paul Brandling trimmed costs in anticipation of a post-Olympic slowdown.

Early 2001 -- Further cuts are made after Compaq's head office in Texas orders global job cuts of 5000 in March and another 2000 in April. Brandling takes the opportunity to shut down the company's direct sales arm, Compaq Connect.

July 2001 -- Compaq reports first-half losses of $201 million and announces 6000 job cuts globally.


Late 2000 -- Local HP CEO Norman McCann answers California's demand for cost savings by restricting company travel and expense accounts.

Early 2001 -- McCann tries to limit the second wave of cost cutting by offering staff a choice between pay cuts or extended leave to reduce the company's holiday pay liabilities.

July 2001 -- HP announces it will cut 7000 jobs despite record earnings in 2000 ($US48.8 billion).

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