Rotten figures with slumping turnover from Amdahl Corp do not bode very well for IBM Corp’s figures which are due tomorrow. Amdahl notes that much of its $40.9m fourth quarter loss and $580m loss for the year came from the $478m pre-tax restructuring charge necessitated by weakness in its primary markets. In 1993, the company cut manufacturing capacity by more than 50% and reduced its workforce by a third. The restructuring charge was demanded by continued weakness in the market for mainframes, and associated reductions in employment, manufacturing capacity and other expenses. It sees the measures cutting costs significantly in future quarters. Amdahl also said it is pursuing alliances and joint ventures that will enable it to cut costs, diversity and speed product development, and capitalise further on what it reckons are good relationships built up with customers, but the figures will leave a nasty hole in the consolidated figures of 44% shareholder Fujitsu Ltd, which is itself suffering very badly from the recession.Summing up, in a relatively short period of time, said Joseph Zemke, Amdahl president and chief executive, we’ve effectively created a new Amdahl with production and operating expenses that are better aligned to the volumes of business we’re experiencing and with an internal structure that will allow us to be more responsive to changing customer requirements and market conditions.
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