HBO & Co. has cut loose about 80 employees at its Atlanta headquarters and elsewhere in a consolidation it says resulted from a routine work-force reassessment.
The layoffs came less than two weeks after the information systems and services company announced a proposed merger with McKesson Corp., a San Francisco-based drug and medical supply distributor. In a stock swap expected to close early next year, McKesson is buying HBO & Co. for $14.5 billion (Oct. 26, p. 12).
Investment analysts responded skeptically to the merger and the claims of the two companies that the merger would produce synergies in their work forces and core businesses.
In conjunction with that announcement, HBO & Co. employees participated in a companywide teleconference with Charles McCall, the company's chairman, president and chief executive officer, during which McCall said no layoffs were in the offing as a consequence of the merger.
HBO & Co. spokeswoman Monika Brown said the layoffs are "completely unrelated to McKesson." Instead, they stem largely from personnel decisions related to the acquisition of Imnet Systems, an Atlanta-based software and document management systems developer with about 300 employees, Brown said (See related story, p. 116).
The Imnet consolidation caused "less than 50" layoffs, she said, but indicated not all of them were at Imnet. The layoffs also extended outside Atlanta, affecting "different pockets all over the country."
In addition, the company's Jerusalem-based development and support operation for a physician practice information system was trimmed to 15 people from the original 45 to 50. The system, called Smart Medical Record, originated from the acquisition of an Israeli software company.
Most of the physician practice product's customer support and development will be moved to Atlanta, Brown said, citing the time-zone difference as one impediment to service.
Brown restated the company's position that it intends to increase rather than reduce the size of the work force to keep the information systems division humming under a joint operation with McKesson. Noting that HBO & Co. would supply 60% of net income in the combined corporation, she said, "We're not going to do anything to jeopardize that business."
HBO & Co. has about 1,600 employees in Atlanta and 7,000 in all, including the Imnet work force. "It's not like we're having wholesale layoffs or anything," Brown said. She said the recent layoffs are results of moves made "in the normal course of business."