Ailing Data General Corp has announced a restructuring plan that will see 400 jobs evaporate worldwide, the consolidation of certain facilities and the write-off of non-strategic assets. The 400 staff members represent about 8% of the company’s 5,100- strong workforce. Data General has seen hard times recently, reporting first quarter results that fell far short of estimates followed by a second-quarter loss, both times citing weakness in Clariion disk array sales as it shifts to fiber channel technology. The Westboro, Massachusetts company says the actions will strengthen its focus on storage and high-end servers. To that end, Data General will abandon future development of all of its Thiin Line internet appliances. It will continue to sell and support those products currently on the market, but the unit is effectively dead in the water. The company will transfer about 100 people from Thiin Line and other units into its Clariion storage business unit. Data General will also be focusing its Aviion server business on high-end systems for Windows NT and systems for high-end Unix using NUMA technology. It will abandon low-end NT systems and instead will buy and resell those boxes for customers that want them, as it already does with PCs. As a result of the restructuring, Data General will take a charge of about $125m in its current third quarter, one-third of that related directly to personnel costs. The rest will account for the write-off of software-related investments and other assets, such as real estate. The software write-offs are mainly in the areas of Thiin Line and software developed for the low-end servers. When all is said and done, the company expects to save $50m to $55m, $100m of which it will re-invest in the Clariion business. Clariion will now have increased sales and research and development resources to support the marketing of new fiber channel RAID storage products. Data General shares fell $0.625 to $14.625 following news of the restructuring.
