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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (92051)	7/6/2001 7:14:04 PM
From: Elwood P. Dowd	Read Replies (2) \| Respond to of 97611

I played 18 today. The worse things get on WS and with CPQ, the more golf I intend to play. I'm sure glad it's summer and I'm not trapped in the house 24 x 7 with this computer. El

To: Night Writer who wrote (92051)	7/11/2001 10:39:52 AM
From: Elwood P. Dowd	Read Replies (3) \| Respond to of 97611

Re: la_confident01 by: la_confident01 (42/M/Mobile) Long-Term Sentiment: Strong Buy 07/11/01 10:34 am Msg: 244074 of 244074 Basis for my view, whats yours. Company will emerge in the months to come more profitable than ever. From: Chairman & CEO - Michael D. Capellas Sent: Tuesday, July 10, 2001 4:19 PM Subject: Strategic Update To: Compaq Global Team Last month, I outlined for you Compaq’s vision, mission and strategy moving forward, as well as the need to make some fundamental changes to transform the company into the leading IT solutions provider. This means best-in-class platforms coupled with best-in-class services. Today, I’m encouraged to see that many of the changes described in the June communication are well underway - and with the kind of enthusiasm necessary to successfully combat tough market conditions. We are continuing to build on our foundation of delivering innovative products - including the recently announced EVO N200, new consumer line-up, two new TaskSmart appliance servers and recent ProLiant family additions - and in delivering great customer value. And we continue to outperform the market in customer satisfaction, the true hallmark of long-term success. In fact, our second quarter performance reflects solid execution on a number of fronts: 1) Strong Services revenue growth - double-digit when measured in local currency. 2) Dramatic inventory reduction -- $600 million across the entire supply chain, well above our $450 million target for the quarter. 3) Stringent cost control - we reduced operating expenses to their lowest level in three years. 4) Aggressive execution of our restructuring plan - that helped offset top line weakness in a challenging economic climate. As a result of these and other efforts - including winning new customers and increasing customer satisfaction - we reported today that we expect to meet current analyst expectations for the second quarter of $0.04 per diluted common share. Restructuring I stated in my June 12th message that our 30-day action plan included reducing structural costs to enable us to price competitively and improve profitability. In this period of slow demand - our Q2 revenue shortfall was primarily due to worsening economic conditions in Europe - we have to take the tough actions necessary to permanently improve our business model while making the investments necessary to become a services and solutions-led business. As a result, we have taken an additional restructuring charge in Q2 of approximately $490 million, which will result in the elimination of about 4,000 positions. Of the 4,000 positions affected, 2,500 represent those originally earmarked for attrition - attrition that failed to materialize due to a weak global economy. An additional 1,500 positions will be eliminated to further reduce structural costs. These reductions - as well as the 4,500 involved in first quarter restructuring actions - will come in part from the closure of certain manufacturing facilities, further consolidation within our Access segment and reduction of administrative support functions. But some reductions are taking place in all areas of the company, both domestically and internationally. The total number of positions impacted by Q1 and Q2 restructuring actions is 8,500. To date, we have reduced 3,500 of the 4,500 positions associated with Q1 restructuring. Clearly, the elimination of these positions represents a difficult time for us all with respect to the loss of fellow employees. We are committed to move on this as quickly as possible and to provide those impacted with the severance programs and outplacement assistance to help them transition successfully. Remember, our intention is to emerge one of the clear winners from the current economic environment, and this restructuring - difficult as it is - is essential to our success. We must execute, innovate and focus relentlessly on adding value to our customers. Thank you for your continued commitment to do just this. Posted as a reply to: Msg 244065 by stubba