First hand accounts out of Fort Collins, Colorado have Hewlett-Packard severely reducing its main workstation operation there. No phase of the business will be unscathed, they say, including sales, marketing, manufacturing and research and development. Further reports indicate that certain responsibilities are being transferred to Hewlett-Packard’s Apollo Division, the company’s pricey 1989 acquisition, now also hurting and in need of shoring up. The fact that Hewlett-Packard looks ready to cut its dedicated workstation sales force, including the Apollo people, by 50%, indicates just how serious things are. Sales are run independently of each of the Hewlett-Packard divisions, and are allowed to allocate and redirect resources to where they will have maximum effect. Poor profitability is the key to the down-sizing and consolidation. Reportedly, marketing will move to Apollo’s site in Chelmsford, Massachusetts and manufacturing to its centre in Exeter, New Hampshire. Exactly what will be left in Fort Collins after the cuts are complete is still unclear. Sources say a third of the 4,000 Hewlett-Packard employees in Fort Collins, many of them Hewlett-Packard veterans or people moved specially in the area, could be affected. Embittered reports claim the Apollo sites are being salvaged merely to just-fy the Apollo acquisition, which cost Hewlett-Packard nigh on half a billion dollars. Those at Fort Collins are apparently aware that they are under the gun, having seen some attrition and what Hewlett-Packard calls excessing – notice to find a new job – already in the last few months. However, an executive committee was said to be meeting in Chelmsford last week to fina-ise the cuts, and could be advising Fort Collins more formally soon. Hewlett-Packard is also reportedly phasing out the computer-aided engineering business it acquired several years ago when it bought Cericor Inc, Salt Lake City, Utah. Before swallowing Apollo, Cericor was Hewlett-Packard’s largest acquisition, bought in 1985 for an undisclosed sum put at $10m to $50m high for a company losing money on sales of around $5m a year (CI No 268). Apparently, the operation, headed by vice-president Bill Parzybok, will initially be halved to maintain the installed base, then simply allowed to wither away rather than sold off. Hewlett-Packard’s policy of bundling the electrical computeraided engineering software on Hewlett-Packard hardware reportedly did not produce a system that could compete with the likes of Mentor Graphics. Unaffected is the company’s mechanical computeraided design unit under Tulman Schad, which however, might be moved over to Germany. Sources fear the cuts will exacerbate Hewlett-Packard’s growing mor-le problems, reportedly the reason for a recent tour of all company sites by company founders David Packard and William Hewlett. Insiders say Hewlett-Packard, frequently touted as a paradigm of American management and famous for its hands-on walk around management style, has lost touch with its employees. Increasing centralisation at corporate headquarters in Cupertino, California is blamed, and the company surveys beginning last year indicate that 25% of the people that work there could easily be enticed to go elsewhere, up significantly from the norm of only 10%. Informed of the substance of the story, Hewlett-Packard, after consultation at a senior level, said that as nothing had been publicly announced, it classed the story as speculation and rumour, and would not offer any comment. – Maureen O’Gara
