Compaq NZ to avoid cuts

By PETER GRIFFIN

Compaq New Zealand has merged its consumer and commercial PC divisions in a bid to cut costs, but is unlikely to be caught up in global staff-cutting.

Worldwide Compaq, which has its head office in Houston, Texas, is expected to shed 5000 employees.

The new merged group in New Zealand will be known as the Access Business Group and will be headed by Andrew Seerden, a former director of both the commercial and consumer units.

Compaq's managing director, Russell Hewitt, said that whispers of restructuring had been filtering down from Compaq headquarters for the past four months, allowing the local operation to make minor personnel cuts in advance.

"There had been rumours that these areas would come together. It's a logical move coming right from head office."

Last Thursday Compaq announced that it would look to cut 5000 jobs, or 7 per cent of its global workforce, to scale back on costs by between $US500 million and $US600 million annually. The company wants to save between $US125 million and $US150 million in the first financial quarter of 2001 alone.

Mr Hewitt said that Compaq employed between 370 and 400 people in New Zealand, including nearly 100 software developers, and that the company had no immediate plans to trim headcount.

"We represent a pretty small percentage of overall staff worldwide. By the time you get down to a country the size of ours, these changes are minuscule. We're not looking at losing any people."

The job cuts follow a belt-tightening trend among major technology companies. Cisco Systems, Intel and Motorola have all said they will shed tens of thousands of employees collectively in the next year.

Compaq's restructured division will also be responsible for internet access devices, including the iPAQ Pocket PC, which Mr Hewitt said is selling strongly in the New Zealand market.

Compaq holds the number one spot in the local PC market and reported revenue in the calender year 2000 of nearly $300 million.