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April 21, 1992

BLIND PANIC? DEC DISBANDS UNIT BORN IN FEBRUARY

By CBR Staff Writer

Taking a bizarre leaf out of the Grand Old Duke of York manual of management, Digital Equipment Corp has disbanded the engineering group it created only in February, giving rise to perceptions that the company is in a deeper crisis than observers had previously realised. The company is also now expected to embark on a new round of lay-offs in addition to those already planned for, with the need for further provisions against its fourth quarter figures – despite still having $694m of the $1,100m reserves already taken that is not yet allocated. It is now down to 126,000 employees and is thought to want to get that down to 100,000 by December. The functions of the group created under chief engineer William Strecker will be distributed to the marketing groups for the separate product lines; the move also affects the heads of personal computers and peripherals operations, and of DEC’s Unix business. The stated aim is to bring product engineering closer to customers; the Wall Street Journal quotes a senior DEC manager saying president Ken Olsen feels DEC is not getting an adequate return on its $1,600m annual investment in product engineering.

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