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May 9, 1994

DEC EYES SALES OF SOME BIG UNITS, SAYS UP TO 20,000 MORE JOBS MUST GO

By CBR Staff Writer

Digital Equipment Corp put numbers on its threatened further blood-letting on Friday, warning that its entire enterprise could be at risk, and say that as many as 20,000 jobs from the present 92,000 may go over the next two years as part of a commitment to return the company to profitability by the end of the calendar year. The company is also following the IBM Corp pattern and looking at selling some of its units, with the disk drive business suggested by observers as one that might go. A joint venture partner for the chip plant in Ayr, Scotland where DEC makes some Alpha RISCs for the world and will also fabricate Advanced Micro Devices Inc microprocessors, is also seen as a possibility. The new job cuts, intended to get the permanent workforce down to 65,000 – 7,000 of the present force are temporary – are likely to be in US sales, manufacturing and overhead areas, and overseas, which generates over 50% of turnover. According to the Wall Street Journal, DEC hired an investment banker to seek a buyer for the disk business, and got serious with two bidders – with a price of $600m being tabled, before the downturn in the disk market killed any interest.

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