HP to fix Asia job cuts by July
REUTERS [ WEDNESDAY, MAY 08, 2002  4:51:11 PM ]

SINGAPORE: Hewlett-Packard Asia-Pacific, which
celebrated the close of its acquisition of rival
Compaq Computer across some Asian cities on Wednesday,
said it would finalise its job cuts in the region by
the end of July. The US computer and printer maker
completed its $18.7 billion acquisition of Compaq --
the largest in the history of the technology industry
-- last week after one of the corporate world's most
bitter proxy battles. HP, which launched the merged
entity on Tuesday in Palo Alto, California, said it
would axe most of the 15,000 jobs it planned to
eliminate in nine months and could save more than the
$2.5 billion promised in cost-cutting. "We're still
looking at the redundancies to be made and will reach
a decision by the end of our third quarter, which is
the May to July period," Paul Chan, HP's recently
appointed Asia Pacific managing director, told a news
conference in Singapore. "We will have a very clear
picture by then." The merged HP, which now trades on
the New York Stock Exchange under the new symbol HPQ,
has about 150,000 staff worldwide, with 20,000 in Asia
outside Japan. Chan, who was Compaq's Asia-Pacific
managing director, said some of business groups might
see fewer layoffs than others. "I would think the
Imaging and Printing Group would have the opportunity
to increase its presence in the market, while the
Enterprise Systems Group and the Personal Systems
Group -- these are two large groups of people coming
together," he said.

Synergies and speed

The staff cuts would be phased over an 18-month period
in some cases, said Adrian Koch, senior vice-president
of the Personal Systems Group. "That would allow us to
look for redeployment opportunities and manage some
planned decreases through normal attrition," he said.
But the merger is not purely a retrenchment game, said
Michael Hoffmann, senior vice-president of the Imaging
and Printing Group. "We're looking at the synergy
potential of the two companies, and people
redundancies is only one aspect. There are other
aspects from consolidation of systems and processes,
and we are going after those synergies with equal
passion," he said. Speed is of the essence, Chan
acknowledged. "We need to be absolutely done with
bringing the two companies together when the economy
comes back," he said.

Consolidating suppliers

HP will also review and consolidate its offices and
manufacturing plants as well as streamline its
suppliers, Chan said. But he added that it had not
spoken to any supplier yet. Venture Manufacturing,
Singapore's largest electronics contract maker, is a
key HP supplier, deriving about 25 per cent of its
revenues from the American firm. Plastic component
makers Chosen Holdings and Avaplas, which supply HP
printer parts and printer cartridge components, derive
between 50 and 70 per cent of their sales from HP. In
a bid to consolidate its merged product range over the
next three to 12 months, HP said it would retain
commercial desktops and laptops under the Compaq brand
but phase out those under the HP brand. It would also
drop its Jornada handheld computer in favour of
Compaq's iPAQ, eventually to be renamed HP iPAQ, while
its consumer range of personal computers would retain
their individual HP and Compaq brandings.


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