April 9, 2002 4:10 PM PDT

HP gives staff details on post-merger jobs

update Hewlett-Packard this week outlined the severance package it will give 15,000 workers should the merger with Compaq Computer go through.

See special coverage: A Fight to the Finish HP has told workers that those whose jobs are cut will have nine weeks to find another job within the company or face being laid off, an HP representative confirmed. Those who are laid off will receive anywhere from four months' to 12 months' pay based on how long a worker has been with the company.

HP has begun outlining its post-merger plans even as the company awaits a formal tally of its March 19 shareholder vote. HP claims that it won the needed majority of votes, but opponent Walter Hewlett has refused to concede and is suing HP in a Delaware court, hoping to get the results of the vote tossed out.

The nine weeks to find a new job, with pay and benefits, is much longer than was given when HP workers were laid off last year. Although workers then had less time to find a job, they did receive a $2,500 bonus, which is not being offered to those who lose their jobs after the merger.

HP is also offering three months of outplacement support, longer than it did the last go-round, the representative added.

Separately, HP this week posted on its internal Web site more details of the process it will use to decide what jobs workers would be given post-merger. The information was made public Tuesday in a filing with the U.S. Securities and Exchange Commission.

"Launching the new company will not mean drastic changes for the majority of employees," HP said in the filing, adding that despite the job cuts and organizational changes, "most workers will continue doing the same job."

HP said the process of reorganizing the company is expected to take several months. It noted that in many countries, the company is required to meet with unions and other employee representatives before changes are made.

HP said it is giving priority to having in place the management of those units that deal directly with customers.

The companies will be fused into one entity through two strategies, called "adopt and go" and "managed selection." Under adopt and go, HP will adopt a product group or division from HP or Compaq and effectively dissolve its once-competing counterpart.

"Most of the employees from the 'adopted' team will be retained to maintain the essential knowledge, skills and continuity that come from working as an intact group," the article stated. Some employees from dissolving groups, however, will remain at the company.

HP hasn't said which product groups of Compaq's it intends to keep. Last week, though, it selected Compaq executives to run its Intel server, business PC and notebook divisions. Most analysts have said HP will likely retain these Compaq divisions and phase out its own competing products.

Under managed selection, managers will build teams by individually selecting employees from complementary HP and Compaq groups. The decision to use one or the other strategy will vary by circumstances and local laws.

"As each layer of managers is selected, the managers, in turn, will select their direct reports from candidates from both companies," the article stated.

In the United States, employees who find their jobs eliminated through this process will then have the opportunity to apply for any open positions at HP. If they don't obtain jobs that way, they will then receive severance and outplacement benefits.

Currently, HP and Compaq employ a total of 150,000 people, according to HP's memo. Fifteen thousand workers will be let go in the merger; the companies laid off about 14,500 employees before the deal.

 

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