The handing out of 400 pink slips at Hitachi Data Systems Ltd is just the beginning of a restructuring which has been on the cards for several months (CI No 3,518), and HDS says other changes will follow. Parent Hitachi Ltd has been looking at ways to get HDS’ business growing and profitably, including buying back Electronic Data Systems’ 16% holding. Price erosion in the mainframe market is the major cause of HDS’ wose. Although it shipped 30% more systems in the year to March 31st than in the previous 12 months, revenues remained flat at $2bn. It doesn’t say whether it makes a profit. Although sales of its ECL Skyline mainframe have slowed following the introduction of IBM Corp’s G5 CMOS processors, HDS says the restructuring is not directly related to Skyline’s performance. There will be a mid-life kicker for the current Skyline series and a Skyline II series will be announced next quarter for delivery in the third quarter of 1999. It declined to say how much business it does on Skyline or how much the 400 lay- offs will save it. It claims to have a backlog of orders for its CMOS Pilot systems. Like Amdahl Corp’s renewed focus on services announced yesterday (CI No 3,541), HDS also plans to re-orient its business around services and indirect sales.
