Following a 16% drop in profits over the first three quarters of its current financial year, Digital Equipment Corp has embarked on a radical reorganisation of its sales, marketing and manufacturing operations in the US. The company intends to follow IBM’s lead of three years ago and seek to cut management overheads by moving a number of managers into direct sales, and separate sales and marketing divisions in vertical industries will be merged, reporting directly to David Grainger, DEC’s senior vice president. In addition, DEC’s nine regional domestic sales units are to lose their current autonomy and be made to mirror the European set-up, where single executives are answerable to John Shields, DEC’s senior vice president. A number of prominent managers have alredy shifted positions within the company, and Charles Shue, Grainger’s predecessor, is no longer involved in day-to-day management of sales. DEC was not prepared to comment on his long term future within the company. As regards manufacturing, DEC is intending to shift up to 12% of manufacturing staff into non-manufacturing areas before the begining of its new fiscal year, July 2. The company has 33,800 workers in manufacturing, and to move them into sales or services will mean a significant re-training programme, possibly of 4,000 people. The changes not only reflect DEC’s concern with poor US sales performance, but an increase in manufacturing efficiency, estimated at 15% per annum, and mainly due to developments in computer technology. The company says that it does not plan to make lay-offs in the reorganisation.
