Burroughs Plans to Trim 8% From Its Work Force : Sperry Employees Among Those Affected; Overall Cuts Estimated at 9,600
Burroughs Corp. said Wednesday that it plans to cut about 9,600 jobs worldwide by the end of the year at Burroughs and at Sperry Corp., the rival computer maker that it acquired last month for $4.8 billion.
Burroughs said the cuts, involving 8% of the combined Burroughs-Sperry work force of 120,000 people, would be made through a combination of layoffs, voluntary retirement incentives, attrition and selective hiring freezes.
Meantime, industry leader International Business Machines said it will cut “several hundred” jobs from its headquarters staffs.
Detroit-based Burroughs ranks as the world’s second-largest computer company behind IBM since its merger with Sperry, which is based in Blue Bell, Pa.
Observers have been expecting Burroughs to announce big job cuts because Burroughs’ chairman, W. Michael Blumenthal, has repeatedly said he planned to boost profits by eliminating duplication of efforts.
“I can’t see where this would be any surprise of any kind to anybody,” said Dean Gulis, an analyst for Roney & Co. in Detroit. “The whole argument for the merger on Burroughs’ part was that they would be able to achieve certain economies of scale.”
Retirement Incentives
Slightly more than 1,000 workers at the two companies are eligible for the retirement incentives, Burroughs spokesman James Kenyon said. He said the number of workers laid off would depend in part on how many could be reduced through the retirement incentives and other means.
Burroughs stock, which was depressed by IBM’s cautionary statements Tuesday about the sluggishness of demand for computers, edged down 25 cents a share to $69.125 on the New York Stock Exchange.
IBM said its cuts will occur when staffs are consolidated in a new office complex in the Westchester County, N.Y., town of Somers, that is scheduled to open in 1988. All employees whose jobs are cut will be offered positions elsewhere in IBM, the company said.
IBM stock, which plunged $5.375 a share on Tuesday following its warning about slow business, fell an additional 62.5 cents a share on Wednesday to $127.50 on the Big Board.
The Burroughs retirement incentives are for employees in selected U.S. organizations who are 55 or older and are credited with a minimum of 15 years of service.
