Megatek Skips Small Buyers, Aims for the Big

With an eye toward boosting its market share of the computer graphics industry, Sorrento Valley-based Megatek Corp. has reorganized its sales efforts and will concentrate more on its large end-user customer base.

As a result, however, 18% of Megatek’s work force, or 85 employees, were laid off 10 days ago, as the company pared its emphasis on “small end-users,” such as architectural firms and individual proprietorships.

“We’re reemphasizing those who are critical to our business,” said Chuck Daley, Megatek’s vice president of finance and administration.

Those would include original equipment manufacturers (OEMs), large end-users and the military/government sectors, which accounted for all but $6 million of Megatek’s $45 million in revenues last year. Sales in 1984 were about even with 1983.

The expenses related to revenues generated by sales to small end-users were disproportionate. Hence the change, said Daley.

The company, a division of Kansas City, Mo.-based United Telecommunications, does not break out its earnings.

Megatek now controls between 5% and 10% of the computer hardware graphics market, but officials hope to secure a 20% market share by 1987, said Daley.

The layoffs and reorganization were designed “to be more responsive to the needs” of the company’s large customers, Daley said.

Work force cutbacks affected both white-collar and blue-collar employees in each of Megatek’s five divisions--financial, administrative, operations, engineering, and sales and marketing.

Workers were told of the immediate layoffs on April 12, and were given varying amounts of severance pay, depending on seniority.