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April 9, 1996


By CBR Staff Writer

In a move that caught Amdahl Corp staffers by surprise, the Sunnyvale company’s president and chief executive Joseph Zemke resigned earlier this month, sending an internal electronic mail message resigning his positions and citing personal reasons for his sudden departure (CI No 2,874). Amdahl issued a statement saying that he had resigned to pursue other interests. Zemke joined Amdahl in 1985 as chief operating officer, became president and board member in 1987 and chief executive in 1992. Amdahl veteran and chairman of the board Jack Lewis, credited with building up the huge cash reserves that Amdahl has got salted away in its coffers (CI No 2,838) takes on the role of acting chief executive until a replacement can be found. Lewis was Amdahl’s chief executive from 1983 until Zemke took over in 1992. Sources we spoke to confirmed that the personal reasons side of the story holds water. However, sources also say that there was an internal financial review, which suggested that the next quarter’s results are expected to be every bit as bad as the fourth quarter of 1995. It made a fourth quarter net loss of $38.3m, including pre-tax write-offs of $53.3m. The way we heard it, Amdahl’s ECL mainframe – a hot temperature and expensive technology – remains Amdahl’s main money earner, but since IBM Corp released its new cheaper but slower CMOS-based mainframes, Amdahl’s mainframe margins have been squeezed. Amdahl’s own CMOS- based mainframes are not due until July. The Silicon Valley Fujitsu Ltd affiliate relies on its mainframe business to prop up its slowly improving open systems servers and software, consultancy and application development software business.

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