HP-Compaq Doubles Integration Team

Hewlett-Packard Compaq Computer

With an apparent victory last week in the shareholder vote on their merger, the two companies now have 1,200 full-time employees working on the integration effort, up from 600 only a month ago.

The stepped-up integration initiative was detailed Tuesday in a memo to HP and Compaq employees from Webb McKinney, president of the HP Business Customer Organization, and Compaq CFO Jeff Clarke, who are overseeing the integration.

"Currently, more than 1,200 HP and Compaq employees are part of 'clean teams' and dedicated full-time to the integration planning effort," the memo said. "We started out last fall with a much smaller team because we wanted to keep as many employees as possible focused on serving customers and delivering on day-to-day business commitments. As we move closer to launch, we expect to draw on additional expertise from the businesses, support functions and the regions."

McKinney and Clarke said the four-phase integration process is nearly complete and that the combined company is "prepared to open its doors and hit the ground running in the April-May time frame."

Still, the two executives noted in the memo that before the two companies can be legally combined, "the HP shareholder vote must be certified," which may take several weeks. "While we await the final tally of the HP shareowner vote, we remain confident--based on a preliminary analysis by HP's proxy solicitor--that we secured HP shareowner approval," the executives said. After the vote is certified, HP also must finalize the necessary legal documents to complete the merger and launch the new company, they added.

In the memo, McKinney and Clarke asked HP and Compaq employees to "please remember that Compaq and HP are required by law to function as competitors until legal close [of the merger and the new company officially launches."

The integration team is preparing presentations to partners, customers, employees and analysts to outline product road maps and go-to-market strategies plus provide some details on service, support and branding strategy, according to the memo. The team also is preparing toolkits and playbooks for channel partners and customer-facing employees that outline "processes, procedures, available resources for engaging customers as the new HP."

McKinney and Clarke said in the memo that the company plans to announce decisions around "job selection and reduction as soon as we can." HP and Compaq already have stated that 15,000 employees will be laid off in the wake of the merger, with most job cuts made in the first nine months. "Those decisions and announcements will be driven by the strategies and operating plans of each business and implemented in accordance with relevant national and local laws," the memo said.

In the memo's closing, McKinney and Clarke thanked employees for supporting "the post-merger integration team throughout the integration planning process, and especially for your continued focus on serving customers and delivering extraordinary business results for HP and Compaq. Now it's time to show the world that we have what it takes--the preparation, focus, determination and talent--to meet the challenge in front of us. "