Compaq Computer Corp Friday gave the final word on what the Digital Equipment Corp acquisition will mean to it from a human resources standpoint. The company confirmed it will be cutting a total of about 17,000 jobs in the 82,000-strong merged company, including some 2,000 of its own staff. The cuts are expected to be carried out over a 12-month period and should mainly hit DEC’s New England operations, as the PC systems unit of DEC and manufacturing operations will be pared down. John Rando, senior vice president and general manager of services, said the cuts in his unit – which now boats about 25,000 staff – will be limited and should mainly be in the administrative area and in some duplicate functions in Europe. Likewise, the majority of the 10,000 combined sales and marketing jobs will remain, as that function is vital to attracting and maintaining enterprise customers Compaq is focused on. Official announcements about where all the cuts will be made are promised in a few weeks. Chief financial officer Earl Mason has previously said that Compaq will record several acquisition-related charges during the second quarter, including charges for the staff cuts. The original charge was said to be in the area of $2bn, but Thursday, an additional charge was mentioned. The company would not make any comment on the size of the charges. Mason said that, excluding charges, the company would see break-even results for the quarter. The consensus estimate of analysts surveyed by First Call was for $0.01. The third quarter is expected be a transitional one, as the integration of DEC will be ongoing, but the acquisition is expected to be accretive by the fourth quarter. First Call was looking for $0.25 for the third quarter and $0.37 for the fourth. Chief executive Eckhard Pfeiffer is hoping the acquisition boosts the bottom line quickly, as he said he is still confident that Compaq can achieve its goal of $50bn in revenue by 2000.
