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Merged HP will send 16,000 staff Paqing

As Wall Street wipes out Don's bonus

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At a news conference yesterday HP CEO Carly Fiorina said ten per cent of the combined workforce of HP and Compaq would be shed if the proposed merger clears the usual statutory and shareholder hurdles. That adds up to between 15,000 and 16,000 staff who'll be sent Paq-ing.

But it may be slightly less, as the real head count at each company is fuzzy. Compaq has shed up to 9000 posts this year, and HP 6000, although the official numbers tend to underplay the real, human losses. For example, HP has been reassigning senior staff to trivial or inappropriate jobs, in the expectation that they'll take the hint and bugger off.

Don Capellas sounded the more relieved of the two at the press conference. At that moment, he'd earned Compaq shareholders a tidy premium, and the alternative - given that he's thrown the proprietary crown jewels overboard - was a steady slide into insignificance.

However, by the end of trading HP's stock price had fallen by 18 per cent, almost exactly canceling out the bonus. The pair boasted how Hewlett-Paquard would become the world's biggest PC manufacturer, which was the angle adopted by the trade press. However, apart from Dell, no one else is making any money from PCs right now, and the two could profitably withdraw entirely - and simply rebadge no-name clones.

(Dell and Compaq already share support facilities in Texas, as we discovered when we tried to get our Presario notebook repaired. Or rather when we tried to get it shipped back to the right address, and not to Florida, but that's a different story.) ®

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