NW and all, good news/bad news:
Good news:
Compaq's Pfeiffer moves to quell Digital's 'significant uncertainty'
By John Dodge, PC Week Online
05.29.98 1:00 pm ET
As the clock ticks down to Digital Equipment Corp.'s last day as an independent entity, Compaq Computer Corp. President and CEO Eckhard Pfeiffer is preparing many Digital employees for what will be their final moments with the company.
In an internal memo to "all Digital employees" that was distributed Thursday afternoon, Pfeiffer did some cheerleading for the proposed Digital/Compaq merger and tried to soften what is expected to be the elimination of 15,000 to 20,000 jobs at the Maynard, Mass., company.
"As pleased as I am with our progress in integrating Compaq and Digital, I recognize that one of the byproducts has been significant uncertainty," Pfeiffer wrote. "You are waiting for decisions to be made--decisions that affect not only you and your jobs but your families and friends as well. My commitment to you is that we will make those decisions as quickly as we can and that we will treat the employees of all three companies [Compaq, Digital and Tandem Computers Inc., which was acquired last year] with the respect and dignity you deserve."
The final step in merging the companies will be shareholder approval, which is expected at Compaq's annual meeting on June 11, Pfeiffer said in the memo. Although calls to Compaq (CPQ) in Houston were not returned, it is still uncertain whether regulators scrutinizing the merger have blessed it. Pfeiffer, however, told PC Week a month ago that government approval was only days away.
One Digital employee who apparently doesn't have to worry about his future is Worldwide Services Group Senior Vice President John Rando, a 21-year veteran of the company. Pfeiffer specifically mentioned Rando and the 14,000 employees in his group and suggested that he will oversee services for Compaq, Digital and Tandem.
"All three companies came together recently for a successful workshop on Compaq's services strategy," Pfeiffer wrote. "John Rando and his team have made excellent progress over the past few months, and we expect the services business to be fully operational by July 1. We see some exciting opportunities in services, and we expect it to drive significant growth."
No other Digital or Compaq executives are mentioned in the memo, but it has been widely expected that Digital CEO Robert Palmer will not play a major role in the new company, often referred to as "enhanced Compaq" and "newco." And as reported last month by PC Week Online, Digital Senior Vice President Bruce Claflin plans to leave the company after the merger is complete.
A point that bodes well for Digital's Alpha CPU architecture is Pfeiffer's strong emphasis on research and development at the combined companies. And he took a shot at potential competitors such as Intel Corp.
"Because of Digital's proud heritage as a technology leader, I particularly want to underscore Compaq's commitment to support advanced research and development," he wrote. "We intend to build on the innovative work that is being done at Digital as well as at Compaq and Tandem. In fact, Digital and Compaq together spent $1.8 billion on R&D last year--more than such respected innovators as Xerox [Corp.] and Intel. Advanced research is vital to establish and sustain our leadership in new and emerging markets."
The memo promised to give more detail once the merger has been consummated. The four areas of detail will be Compaq's vision and strategy, how the company will be organized and managed, the next steps in the integration process, and who will and won't be offered jobs in the combined company.
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Bad news: According to this same site, Intel is delaying Merced by 6 months. Ouch.
Robbie
P.S. Thanks to everyone who took up for me regarding the now infamous joke crime. You are on the private joke list.
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