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Monday, 11 November, 2002, 16:18 GMT
Hewlett-Packard president resigns
Michael Capellas
Mr Capellas has just ridden out a massive merger
Michael Capellas, one of the driving forces behind the computer mega-merger of Compaq and Hewlett-Packard, has resigned as president of the combined company.

He stepped down just hours after a newspaper report suggested that Mr Capellas was in line to be the new chief executive of troubled telecoms giant WorldCom.

Hewlett-Packard said in a statement Mr Capellas would leave the company "to pursue other career opportunities".

He became president of the merged company one year ago, after Hewlett-Packard bought Compaq for about $20bn (12.5bn).

WorldCom has not responded to the reports.

The announcement sent HP's shares tumbling by more than 10% in early trade on the New York Stock Exchange.

Transition point

The merger created the world's biggest computer company, with what then were combined revenues of $87bn.

Thousands of jobs were cut in efficiency savings, as both firms tried to ride out the global hi-technology slump.

Carly Fiorina, chief executive of Hewlett-Packard, stayed at the top of the combined company.

In a statement Ms Fiorina said the merger of both companies had "reached a natural transition point".

Mr Capellas was quoted as saying that he was "comfortable making this move because of the progress of the integration, HP's market momentum and the strength of the management team".

HP said Mr Capellas would also leave the company's board of directors and that the president spot will not be refilled.

The WorldCom challenge

If the report in the Wall Street Journal is true and Mr Capellas is indeed seeking the top job at WorldCom, he may face an even greater challenge than the merger of Compaq with Hewlett-Packard.

Bankrupt telecoms firm WorldCom is in serious trouble, following revelations that some of the firm's top managers fiddled the accounts to the tune of $9bn.

Running costs were booked as capital investment, which allowed the firm's top accountants to claim good profits while in reality the firm was making a loss.

The current chief executive of WorldCom, John Sidgmore, had said a few months ago that he wanted to leave the job once a successor had been found.

WorldCom

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