Michael Capellas, who recently resigned from Hewlett Packard has been named as the new Chairman and CEO of WorldCom.

The new chairman and chief executive of WorldCom Michael Capellas has promised to improve ethics at the scandal-plagued telecommunications company.

Troubled telecoms group WorldCom today named former Hewlett-Packard president Michael Capellas as its chairman and chief executive.

Shares in Hewlett-Packard fell 10% when it was announced that Michael Capellas, second in command, was leaving the company.

Compaq says its shareholders have endorsed the company's plan to merge with Hewlett-Packard by a nine to one margin.

Compaq has predicted that it will have a better-than-expected 2002.

Hewlett-Packard and Compaq plan to award €613m in bonuses to key employees as an incentive to stay on if their merger goes through.

In its second wave of staffing cuts this year, Compaq Computer Corporation said yesterday it was trimming 4,000 more jobs - bringing the total number of workers it plans to cut this year to 8,500.

Compaq is to retreat from the PC sales war and refocus its business on software and computer services.

The world's largest personal computer company is cutting 5,000 jobs and warning that its earnings will fall far short of forecasts.