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Wyse to Lay Off 560; President Resigns

From Times Wire Services

Wyse Technology Inc., struggling in the fiercely competitive market for IBM-compatible personal computers, announced Thursday the resignation of President and Chief Operating Officer Phillip E. White and disclosed plans to dismiss about 560 workers.

The San Jose, Calif.-based company also said it expects to report a loss for the nine months ended Dec. 30.

Bernard Tse, chairman and chief executive of Wyse, will assume White’s day-to-day responsibilities at the computer manufacturing company.

White, who joined Wyse in 1986, left to become chief executive of Informix Corp., a database management and software products company based in Menlo Park, but will remain on Wyse’s board.

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“White is extremely good and competent, but he became frustrated at Wyse because it is in a bad situation that’s going to get worse” because of stiff competition, said Michael Murphy, editor of the California Technology Stock Letter.

Wyse has a good distribution outlet through BusinessLand, Murphy said, but needs to diversify its product line and come up with a clone of International Business Machine’s more advanced personal computer.

“I think they will cut more jobs,” Murphy said. “They have to do some serious strategic reorienting. I wouldn’t be surprised to see them shut down some product lines.”

Wyse built a lucrative business selling computer display terminals, but its efforts to translate that success into the market for complete PCs has largely failed, other analysts said.

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Wyse said it would slash the 560 jobs--about 15% of its work force--through cutbacks and attrition in reaction to a sharp decline in third-quarter sales. The company said the reduction includes about 400 positions in its Far East manufacturing operations.

Wyse said sales in the third quarter ended Dec. 30 would be between $60 million to $70 million. That is less than half what it forecast in early October, computer analysts said.

It said a loss in the quarter would wipe out profits of $11.7 million, or 78 cents a share, earned in the first six months.

Wyse’s shares closed down $1.00 at $6.625 in trading on the New York Stock Exchange.

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Computer analysts blamed the company’s problems on several factors--lack of PC expertise, a late entry into the field and initial quality problems.


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