‘Business Has Not Materialized’ : 50 Employees Laid Off by Printronix; 250 This Year
Responding to a continuing decline of the computer products market, Printronix Inc. last Friday laid off 50 more employees.
That brings the number of layoffs since January to 250 and leaves the Irvine-based manufacturer of printers for micro- and minicomputers with 937 employees. The combined layoff over four months is the largest in the company’s history.
“Business has not materialized as we anticipated,” said Jerry King, director of human resources. “Some orders have been canceled, other anticipated business has not been realized,” he said.
Last January, when the first round of job cuts was announced, King had warned that “if business doesn’t improve, there may be further adjustments necessary.” Printronix officials said they are not certain about the immediate future of the computer industry. “We are cautiously optimistic,” said King, noting that the company is still hiring a few engineers to assist in new product development.
Unlike the January layoffs, which affected mostly production workers, the latest job cuts were across the board, eliminating some production, supervisory and professional staff.
Computer industry analysts said the layoff is a logical move for Printronix. “I think they are smart to cut before they start losing money,” said Don F. Sinsabaugh, an analyst with New York-based Swergold Chefitz & Sinsabaugh Inc.
Sinsabaugh said he expects Printronix to post earnings of $7.5 million for its last fiscal year ended March 31, compared to $7.8 million in its 1984 fiscal year. The company’s earnings fell over the last six months, he said, as growing concern about the strength of the national economy and rising interest rates prompted corporations to postpone large capital expenditures, including orders for new computers.
Printronix is not alone in trimming its work force to better fit the shrunken computer market. One of its main competitors, Data Products Corp., has laid off 200 workers since October and plans to close its Irvine plant on July 1, laying off another 300 workers. “Orders have dropped throughout the industry,” observed Data Products spokesman Dave Rosenbloom.
Forecasts Upturn
But Sinsabaugh forecasts that the outlook for manufacturers of computer-related products will brighten in the second half of this year. He predicts that the Federal Reserve Board, in an effort to boost the national economy, will take action to loosen credit and lower interest rates, thus sparking computer sales.
Jonathan Art, an analyst with the Gartner Group, based in Stamford, Conn., said Printronix is “known for good, conservative, stable management.” The company’s current setback, he said, is beyond its control. “No one knows if it is a one- or two-quarter blip or whether the computer business is going into a recession,” he said.
