As part of “business as usual,” Hewlett-Packard Co. (HP) could further trim its workforce before finalizing its planned merger with Compaq Computer Corp., the company said in a report filed Monday with the U.S. Securities and Exchange Commission (SEC).
In addition to the already announced 15,000 layoffs – or 10 per cent of their combined workforce – that HP and Compaq have slated to make in the first two years following the merger, HP could make further reductions “in defined areas of the company,” the SEC frequently asked questions filing read.
“Actions taken may include decisions that are considered ‘business as usual’ for HP, such as consolidations, decisions to exit particular businesses and divestitures/outsourcing,” HP said.
The company added it expects the merger to be finalized in five to eight months. In addition to providing further information to the SEC, the filing was also posted on HP’s internal Web site to address employees’ concerns, the company said.
HP announced Sept. 4 that it planned to buy Compaq in an all-stock deal valued at that time at US$25 billion. Since then, share prices for both companies have tumbled, making the current value of the merger significantly lower.
Similarities between the two companies would create significant job duplication, analysts have said, leading to a number of layoffs.
In addition, the sinking economy has led to further belt tightening by both companies. Compaq issued a third-quarter revenue guidance just yesterday, saying that it expects to report an operational loss of between US$0.05 and US$0.07 per diluted common share. The company pinned some of its increasing financial woes on the Sept. 11 terrorist attacks in the U.S., which have resulted in dampened consumer demand.
HP, in Palo Alto, Calif., is at http://www.hp.com/.
