Kaypro Says It May Lay Off 100 Workers

Blaming a shortage of semiconductors that has slowed production of its personal computers by up to 30% in recent weeks, Kaypro Corp. said Wednesday that it may lay off 100 workers this week.

A company spokeswoman said 38 employees had been let go as of Wednesday. More employees will be given pink slips today and Friday, she said, with the total depending on whether certain workers will accept shorter work weeks or “job sharing” arrangements.

Cutting 100 jobs would mean a 23% reduction from the 429 workers at the Solana Beach-based manufacturer as of April 8, the spokeswoman said. Before this week, the company had laid off an additional 100 workers since Aug. 31.

Both the company’s Executive Vice President John Hentrich and Controller Robert Gorski resigned from the company in recent weeks. Replacements have not been named.

At Kaypro’s annual meeting last month, company officials said the shortage and higher prices of 256K dynamic random access memory (DRAM) computer chips will have a “dramatic” negative impact on the company’s financial results for the quarter ending May 31 unless the shortage is alleviated.

Also at the shareholders meeting, Kaypro President David Kay said delays in chip shipments had caused a “10% to 30% reduction in all lines” of Kaypro computers shipped over recent weeks.

Kaypro reported a $2.2-million loss on $19.5 million sales for the quarter ended Feb. 26. Second-quarter sales were 32% less than for the same period a year ago. The company blamed engineering and production problems and price discounting for the unfavorable results.