Data General Plans Layoffs, Plant Closings
Data General will reduce its worldwide work force by 1,300 and shut down U.S. manufacturing plants for five days this summer because of a weak computer market, its president said Monday.
Meanwhile, in Palo Alto, Hewlett-Packard announced Monday that it will close most of its U.S. facilities during the already short Fourth of July week and ask 84,000 workers to take three days off--paid or unpaid.
At the same time, two smaller semiconductor firms, Raychem Corp. and Micom Systems, reported layoffs.
Data General, based in Westboro, Mass., also predicted a loss from operations for the quarter ending June 29 because of a slowdown in computer sales.
“The erratic character of demand makes it difficult to predict either revenues or profitability beyond the next few months,” company President Edson D. de Castro said in a statement released Monday.
Data General said it would pay laid-off employees their regular weekly pay for one to five months, depending on length of service to the company. The company will also pay life and health insurance for 90 days.
The company will set up counseling centers for employees at offices and plants in Westboro; Sunnyvale, Calif.; Raleigh, N.C.; Portsmouth, N.H., and Westbrook, Me.
Data General first announced a slowdown in orders in February and has since cut back on hiring and spending.
It announced a shutdown of U.S. manufacturing operations for seven days around the Memorial Day and Fourth of July holidays. Monday, the company said it would extend the three-day shutdown planned for the week of the Fourth of July to an additional five days, July 8-12.
More shutdowns may come if the slowdown persists, officials said.
Total worldwide employment before the layoffs was 18,000, and total U.S. employment was 13,000.
Hewlett-Packard, a computer and electronics company, said that only its sales and service offices will remain open during the holiday week. July 4 and 5 already were scheduled as holidays for Hewlett-Packard workers in the United States.
About 45,000 U.S. workers in manufacturing and administrative operations have been asked to take July 1-3 off, either as paid vacation days or unpaid time off, the company said.
The remainder of the company’s 84,000 workers worldwide will be asked to take three days off before July 31 on dates determined locally, it announced.
“This action is a further cost-cutting measure, following those implemented last month, in response to general sluggishness in the U.S. economy and the previously reported slowdown in our overall order rate,” said Dean O. Morton, executive vice president and chief operating officer.
Hewlett-Packard undertook cost-cutting measures May 18 after reporting that its orders for the second quarter were 1% ahead of orders for the second quarter of 1984. The measures included a voluntary time-off program and restrictions on travel, hiring, overtime and contract labor.
Raychem, which reported plans in March to reduce its work force by 300, said Monday that an additional 200 positions will be eliminated in the company’s domestic and overseas operations.
Raychem currently has 9,600 employees worldwide.
Simi Valley-based Micom Systems said it reduced its Southern California work force by 95. The company attributed the reduction to the consolidation of two Southern California manufacturing operations.
On Friday, in Cupertino, Calif., Apple Computer announced that it was laying off 1,200 people and closing three of its six plants as part of its reorganization plans.