2 Top Executives Fired, 250 Laid Off at MAI Basic Four

The new owners of MAI Basic Four Inc., a Tustin computer maker, have fired the firm’s two top executives and laid off 250 employees, including four of its 21 vice presidents. Ten of the 21 vice presidents were reassigned to other positions.

The cutbacks this month at Basic Four represent 15% of its domestic work force; the bulk of the dismissals--about 200 of them at the Tustin headquarters--occurred last Friday.

The layoffs were ordered by a group of investors led by Bennett S. LeBow of New York, who on Jan. 29 bought the company from New York-based Management Assistance Inc. for $105 million in preferred stock, notes and cash. William Weksel, Basic Four’s acting chief operating officer, said that on March 4 the new owners fired company president Stephen J. Keane and Joe Barsa, president of the firm’s worldwide marketing operations. Weksel said the LeBow group is looking for a new chief executive officer.

In addition, Weksel said, the new owners last Friday made staff cutbacks in all departments, including management and non-management employees. Weksel said the owners determined that the company, whose computer hardware and software operations have suffered two years of operating losses, could not turn a profit this year without slashing overhead. The large number of executives, he said, made the company costly and unwieldy.

“The company had too top-heavy a management structure and too many people for the revenues it was generating,” Weksel said.

Weksel added that Basic Four, which designs computers and software for specialized business uses, still employs a work force of 1,100 at its 350,000-square-foot plant in Tustin. In all, he said, the company has about 3,000 employees, about half in the United States and half overseas.

Founded in 1971 by Management Assistance, Basic Four became a Wall Street favorite when its computer sales rose an average of 40% a year between 1975 and 1979, a pace that was just below the high-flying 44.3% average sales growth of the computer industry.

For the year ended Sept. 30, Basic Four reported profits of $1.2 million on $260 million in revenues, despite losing $10 million on hardware and software operations.