Posted on 12/27/2002 6:44:06 AM PST by vannrox
HP describes plans to lay off entire design teams
By Rick Merritt
EE Times
March 11, 2002 (6:08 p.m. EST)
SAN MATEO, Calif. — If shareholders approve the merger of Hewlett-Packard Co. and Compaq Computer Corp. next week, the combined company will move quickly to lay off several entire design teams.
Using a so-called "adopt and go" strategy formulated by members of a 900-person integration team, the staffs of operations for the combined company's best products as identified by the team could increase 10 percent to 20 percent, while most employees would be laid off at product groups that are not on integration team's list.
The integration plan, which includes new product road maps and organization charts, must remain under wraps until shareholders vote on the merger March 19 and 20, said spokesmen for the team, which gave a final update on its work on Monday (March 11).
"The basic assumption is [that] we will adopt the management teams that go with the business or function" being retained, said Webb McKinney, who heads the integration team for HP. "It won't be 100 percent. We will bring some new members to teams, but not enough to destabilize them."
The company has articulated that philosophy before, but the tough calls on 15,000 estimated corporate layoffs have not been made any easier by a six-month wait since the merger was announced and by a prolonged proxy battle leading up to the shareholders' vote.
"A large merger like this is by definition unsettling to employees. Obviously this is unsettling because we can't tell employees which jobs will stay and which will go,' McKinney said.
An understanding of design and engineering at the two companies is "very key to the synergies and value-capture of the merger," he said.
The merged company will spend more than $4 billion, or about 4.5 percent of sales, on R&D, said Jeff Clarke, who leads the integration team for Compaq. That would be a step up from the 3.5 percent of sales Compaq spent on R&D, but a decline from the 5.4 percent of sales that HP spends.
The merged company will adopt Compaq's ability to make quick decisions while retaining HP's engineer-like culture, McKinney said.
"HP has a methodical approach to making decisions. We are a company founded by engineers and we have an engineering culture," he said. "Compaq largely grew up as a PC company that had to make decisions quickly and correct them the next time around as needed."
Clarke, a former employee of Digital Equipment Corp., said the two companies studied a number of large mergers, including the Compaq/Digital combination, to make sure they did not repeat old errors.
"We weren't clear about product road maps, we didn't communicate to employees well and the financial plan didn't have full accountability," said Clarke of the Compaq/Digital merger. "[Compaq chief executive] Michael Capellas addressed a lot of this when he became CEO, making hard calls on accountability and product road maps."
McKinney estimated that, if approved, the merged HP-Compaq would be three times the size of the next largest high-tech merger.
Hell.. lay 'em ALL off and get 100% profits!!!
Matters not to him, Willy Green or Ambrose. The three of them are part of the less-than-vast-bottom-wing conspiracy. They get their kicks out of posting every item them can find regarding layoffs. Maybe a shrink can explain their negative, doom and gloom mind-set.
No, but cutting the 20% might increase the probability of the remaining 80% keeping their jobs and prospering in the long run. If you don't have the wisdom and courage to sacrifice few to save many, you will probably end up with the 'many' laid off, or dead or whatever the threat is. Tough decisions are part of leadership.
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