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July 26, 1987

BACK TO BASICS AS DATA GENERAL CLOSES EUROPEAN HEADQUARTERS IN PARIS

By CBR Staff Writer

Unaccountably missing from Data General Corp’s announcement of the plants to be closed and consolidated in its restructuring last week was the fact that the minimaker also intends to close its European headquarters in Paris, at a cost of the jobs of 30 of the 70 people employed there. The four European regional operations – UK & Ireland; Central – the German-speaking countries; North – Scandinavia and Benelux; and South – France, Italy and Iberia will now all report direct to corporate headquarters in Southboro, Massachusetts. The company says that the Paris closure is the culmination of a four-year plan to give the regions more autonomy, but the move was clearly hastened by the need to cut costs. All told, 950 people are to be made redundant, and in an interview with the New York Times, co-founder and chief executive Ed de Castro declared frankly that the company has made a number of mistakes over the past three or four years. Most important was the strategy of pursuing large corporate accounts – those people want to buy from companies their own size and are increasingly standardising on DEC and IBM kit.Another mistake, said de Castro, was not being quick enough in pursuing Sun Microsystems in Unix workstations. He also says the company dispersed too much organisationally and geographically. His strategy now is a return to basics, concentrating on Data General’s traditional OEM and reseller markets. Data general has chosen Bridge Communications, Mountain View, California as its local area networking systems partner. The two will jointly develop and market local networking solutions for Data General users to open system standards.

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