As part of its ongoing and difficult digestion of Digital Equipment Corp, Compaq Computer Corp announced Monday that it is consolidating the North American manufacturing operations for high-end Alpha processor-based systems. The company will cease production of the systems at its Salem, New Hampshire facility and transfer the work to existing plants in Fremont, California and Houston, Texas.
Compaq says the move is being made in an effort to simplify its supply chains and manufacturing wherever it can in order to streamline order fulfillment. The transition is expected to take six to nine months and will see roughly 900 employees laid off. Not all of those jobs will be permanently lost, however, as a small number of the staff in question will be offered the opportunity to relocate and an undetermined number of additional workers will be hired in Fremont and Houston.
The acquisition of DEC, announced nearly a year ago, has been more difficult than Compaq expected and the company is still looking for ways to cut costs across the board as its bottom line has suffered. The DEC high-end business affected in the latest move failed to live up to expectations in the recently-completed first quarter. About 12,600 jobs have already been cut since the merger and the resulting decline in the company’s fortunes has led to the ousting of CEO Eckhard Pfeiffer and the resignation of several other top executives, including CFO Earl Mason.
