May 11, 1999 2:20 PM PDT

Compaq management exodus cranking up

The Compaq management shuffle continued today, and it may be just beginning.

John Rando, senior vice president and general manager of Compaq Services, today became the fourth relatively high-profile Compaq executive to resign from the company in the wake of the forced resignation of former chief executive Eckhard Pfeiffer less than a month ago. And, according to most observers, he won't be the last.

"You will see a lot of departures in the next couple of months," said Kurt King, computer analyst with NationsBanc Montgomery Securities.

"[Chairman Ben] Rosen is cleaning house. There are people who are going to look for other opportunities. There are people who don't feel they want to go through a reorganization," King said, adding that "Rando was a surprise."

Compaq, in fact, could find itself in the middle of the high-tech employment crunch, some conjectured. The company is attempting to reform its ranks in the midst of a management bidding war in high tech, a time when high-powered jobs for the seven-figure crowd seem to be available everywhere.

Yesterday, for example, Kenny Kurtzman, manager of Compaq.com, left to become chief executive at Ashford.com and took David Gow, a director of strategic planning, with him. Earlier, Mike Heil, Compaq's former general manager of worldwide sales, and Earl Mason, former CFO--two executives associated with Pfeiffer who many said would not likely have survived a reorganization--took off for CEO spots at other companies.

Others will probably answer the call of retirement. Rando stepped down for personal reasons, an explanation offered by both Compaq and analysts.

"We're talking about major disruptions in the business-as-usual atmosphere over there," said Roger Kay, computer analyst at International Data Corporation.

Compaq, he added, could even start to go the way of Digital, which had become a relatively inert company prior to its acquisition by Compaq. "If management continues to melt down, the [corporate] assets start to lose their value. I don't know if they are there yet, but this could serious," Kay said.

Kim Brown, an analyst at Dataquest, said that "Every company is running into this. It is a gold rush: Options are off the map."

How Compaq fares on the employment front may end up depending on Rosen. King, who said that Compaq is not in the midst of a "brain drain," said that the mood among the employees has picked up since Rosen has helped take over management. "They feel better today than they did a month ago," said King.

Brown added: "Ben's an amazing guy. Whenever he gets involved in management, things take off."

Still, managing and maintaining a structure won't be easy, Kay noted. Rando's unexpected departure suggests resumes are probably flying all over in Houston. "Headhunters probably consider Compaq ripe for the picking," he said.

 

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