Compaq to lay off 5,000 as part of Digital merger

Compaq Computer has announced plans to lay off 5,000 employees worldwide as the company moves to streamline its manufacturing operations following the recent acquisitions of Digital Equipment and Tandem Computers. Compaq previously announced it would lay off 15,000 Digital employees and 2,000 Compaq employees following the acquisition of Digital, which was finalised on June 11. Manufacturing facilities in Singapore, China, Australia, Taiwan, Japan, Scotland, Brazil and the US will be affected by the restructuring plans.

Compaq Computer has announced plans to lay off 5,000 employees worldwide as the company moves to streamline its manufacturing operations following the recent acquisitions of Digital Equipment and Tandem Computers.

Compaq previously announced it would lay off 15,000 Digital employees and 2,000 Compaq employees following the acquisition of Digital, which was finalised on June 11.

Manufacturing facilities located in Singapore, China, Australia, Taiwan, Japan, Scotland, Brazil and the U.S. will be affected by the restructuring plans.

Specifically Compaq says it will:

--consolidate Digital's and Compaq's manufacturing plants in Singapore;

--shut its Shenzhen, China, facilities and move production of enterprise power supplies to partner companies, while the DeskPro Personal Computer will be manufactured by Start Digital Computer (Fujian), a Compaq joint venture in Fuzhou, China.

--merge Digital's configuration center in Sydney, Australia, with Compaq's Australian Technology Center at Rydalmere;

--phase out Digital's Taiwan facility by year's end;

--consolidated operations in Japan at Digital's configuration center in Akiruno-city, while Compaq Japan will initiate the company's Configure To Order (CTO) operations;

--close the Tandem plant in Stirling, Scotland, and transfer operations to Compaq's plant in Erskine, Scotland, where portable, consumer, and enterprise products for the Europe, Middle East and Africa regions are built; consolidate Digital's Irvine, Scotland, PC production operation with Erskine and relocate Compaq's services organisation from Erskine to Irvine;

--close Digital's Sao Paulo, Brazil, manufacturing plant and Compaq's distribution center in Jaguariuna, Brazil, and move Digital's manufacturing activities to Compaq's facility in Jaguariuna.

--close all PCA board and some consumer product manufacturing operations at Compaq's headquarters in Houston, Texas, which will continue to be Compaq's worldwide manufacturing headquarters; eliminate some staff positions at the former Digital manufacturing headquarters.

--restructure and resize Digital's manufacturing operations in Kanata, Canada, as a configuration center for the Canadian market throughout 1998.

By consolidating its manufacturing sites and reducing its number of employees, Compaq aims to deliver 95% of all products anywhere in the world within five days or less, according to a company statement.

Compaq, in Houston, can be reached on the World Wide Web at http://www.compaq.com/. Digital, in Maynard, Massachusetts, can be reached on the Web at http://www.digital.com/.

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