275 Workers Get Walking Papers at Datagraphix : Anacomp Inc. Cuts Force at Newly Acquired Subsidiary
Anacomp Inc. lowered the boom Wednesday on its newly acquired Datagraphix Inc. subsidiary, laying off 275 employees, including 225 employees in San Diego and El Cajon. Another 60 workers, including about 30 in the San Diego area, will be discharged over the next several weeks unless they accept transfers.
Employees were informed of the layoffs when they reported to work Wednesday. Those affected were told to clean out their desks and leave the premises immediately, an Anacomp spokeswoman said. The job cuts amount to an 11% reduction in Datagraphix’s 2,500-member work force, half of which is based in San Diego County.
First announced last month, Anacomp’s $128-million acquisition of Datagraphix from General Dynamics Corp. became final Tuesday, creating a company with 3,600 employees and $350 million in annual revenues.
Maker of Special Equipment
Datagraphix is the world’s leading manufacturer of computer output microfilm equipment, and Anacomp is the largest services company in that field, with 56 service centers scattered throughout the country. Customers, including banks and government agencies, use the equipment to convert computer data to microfilm or microfiche.
Anacomp said it will float a high-yield or “junk bond” convertible debenture issue later this week through the investment banking firm of Drexel Burnham Lambert to finance the acquisition.
At a press conference, Chairman Louis P. Ferrero of Indianapolis-based Anacomp said most of the layoffs were necessary because of “overlaps” created by the acquisition. Other Datagraphix jobs were expendable because they were connected to General Dynamics’ status as a defense contractor, Ferrero said.
“We tried to be as sensitive (in handling the layoffs) as we possibly could,” said Ferrero, 44. Datagraphix accounting, engineering and administrative departments were among the hardest hit by the layoffs, employees said.
In interviews last fall after General Dynamics announced its intention to sell Datagraphix as part of a strategy to rid itself of all non-defense-related businesses, several industry observers said Datagraphix layoffs were inevitable because the operation was not profitable enough.
The job status of Datagraphix President Ed Keating was uncertain, although Ferrero said Keating has not been asked to resign. “Ed is reviewing his options and he will make his decision (on whether to stay) in the next couple of weeks,” Ferrero said.
A Keating-led Datagraphix management group was one of six buyers that lost out to Anacomp in the bidding for Datagraphix. Ferrero would not identify the other bidders.
Decision Pending
Another 150 Datagraphix jobs, including 75 in San Diego related to Datagraphix’s non-impact computer printer line, could be in jeopardy. Anacomp has not yet decided what it will do with the printer product, Ferrero said.
Although Datagraphix is twice as large as its new parent in terms of sales, Anacomp’s headquarters will remain in Indianapolis. Datagraphix reported net income of $10 million on $241 million in sales in 1986, while Anacomp reported net income of about $3 million on $108.8 million in sales for its last fiscal year, Ferrero said.
The stock market has responded favorably to the merger. When Anacomp’s deal to acquire Datagraphix was announced early last month, Anacomp stock was trading at about $4 per share on the New York Stock Exchange, Ferrero said. On Wednesday, Anacomp stock was up to $7 3/8, off 1/4 on the day.
Ferrero was Datagraphix’s national sales manager until leaving in 1975 to found his own services company, which later was merged into Anacomp. He has been Anacomp chairman since 1983.
