The incredible shrinking computer company, Digital Equipment Corp, has finally decided that it really does need to shed the full 20,000 jobs that had been widely canvassed, representing a daunting 23.5% of the 85,000 strong workforce, and will have to take a hit of $1,200m for the fiscal fourth quarter that ended July 2. The job cuts – to be made over 12 months rather than 24 as previously suggested – are part of a plan to simplify management structure, and are intended to save $1,800m a year. It will take another $350m to $400m in non-cash expenses against the figures for the year just ended. The reorganisation will see DEC flood the market with property, because it intends to cut the floorspace it occupies worldwide by 10m square feet, 31%, to about 22,000 square feet over two years. The restructuring will eliminate its traditional matrix management approach, replacing it with two main divisions – a computer systems division under Enrico Pesatori and a components division under Charles Christ. It will create a new Advanced Technology Group to identify opportunities in mobile and wireless communications, multimedia computing, and support of Internet activities. It will also establish multivendor customer services, Digital Consulting and semiconductor operations subdivisions.
