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Technology Stocks : Hewlett-Packard (HPQ) -- Ignore unavailable to you. Want to Upgrade?

To: PCSS who wrote (1881)	10/9/2002 12:18:19 AM
From: PCSS	Read Replies (1) \| Respond to of 4345

INTERVIEW-HP not counting on 2003 tech recovery, exec says SAN FRANCISCO, Oct 9 (Reuters) - Hewlett-Packard Co. (HPQ) is not counting on a pickup next year in the technology industry, an executive at the No. 1 printer and personal computer maker said in an interview. Palo Alto, California-based HP is struggling like its competitors to deal with the economic slowdown that has hurt business, but it has more room than many to cut costs, thanks to its $18.7 billion acquisition of Compaq Computer in May, analysts say. Executive Vice President Michael Winkler, talking ahead of the launch on Wednesday of an upgraded Web site for commercial sales, said HP foreseeably could save more than the $3 billion annually in operating costs that Chief Executive Carly Fiorina has promised. Such savings are crucial in the current environment. "I think nobody is counting on a recovery in 2003 now. Lord knows we'd like to see it happen in the second half of the year and some think it may happen," said Winkler, head of global operations, the division in charge of e-commerce, customer management systems and HP's supply chain. "We've talked to customers recently who have said their spending plans are flat. But if they were to see the economy improve, they believe they would invest more in IT (information technology)," he added. "We are just following the macroeconomic indicators." HP's improved business-to-business Web site makes it easier to track orders, confer on line with HP sales people, and HP also has integrated its system with well-known procurement software used by major customers. HP took its cue from Internet vendors like Amazon.com Inc. (AMZN) and online auctioneer eBay Inc. (EBAY) , rather than Dell Computer Corp. (DELL) , the direct seller that is HP's top competitor among PC makers, Winkler said. Taking a business orders over the Web was $25 to $35 cheaper than by phone, a significant savings, and customers who ordered on the Web were easier to keep, Winkler said. "Technology buying has not recovered the way people had hoped for, and the survivors are going to be the ones that have very lean cost structures." HP recently increased anticipated post-merger job cuts by 1,800 to about 16,800, citing the economy and the need to keep costs low. HP is still hiring in some areas, however, offsetting some of the job cuts, and some efficiency gains are being used to fund other projects, such as increasing the size of call centers as the Web order systems free up some people. "I don't think you'll see a dramatic difference from what has been published today in the head-count side of things. I do think we are finding additional savings in procurement, logistics and distribution and IT that can contribute potentially beyond even the $3 billion in integration savings that Carly has committed," Winkler said.