AST Research Inc has become the latest PC manufacturers to fall victim to ferocious competition and price-cutting in the market and plans to reduce its worldwide workforce by 1,120. This cut-back, equivalent to 35% of its workforce, is part of a complete reorganization of its organization in north America and Asia. In effect, AST has given up any attempt to compete in mass markets for PCs, where falling prices and the irresistible rise of Dell Computer Corp’s build-to-order model have left the smaller players struggling. AST president and chief executive S.T.Kim said: Looking squarely at our recent performance in the context of the competitive landscape for PCs, our long-term goal can no longer be to sell more PCs to more customers. There is a place for a fast and nimble player to become the PC solution provider for critical emerging target markets. Inevitably, AST says it will implement a build-to-order distribution model although production at its main Fort Worth, Texas manufacturing plant will be scaled down. In Asia, AST will rely heavily on the facilities of its Samsung Electronics parent. European operations are still under review and plans will be announced shortly. AST cut its workforce by 25% in April this year (CI No 3,145) shortly after Samsung bought total control of the company. It has been a poor investment for the Korean giant and lost $417.7m in 1996 compared with $263.2m the previous year (CI No 3,091).
