Computer Firm Will Eliminate 120 Jobs : AST Research Has $8.9-Million Loss in Quarter
AST Research Inc. in Irvine, buffeted by increasing competition in the personal computer industry, Tuesday reported an $8.9-million loss for the quarter ended Dec. 30 and said it is eliminating 120 positions.
AST handed out pink slips Monday night and Tuesday morning to 70 management, marketing and assembly employees in Irvine. The layoffs took effect immediately. AST said the dismissed employees would receive severance pay.
Twenty Orange County positions that were vacated last month through attrition will not be filled, the company said.
In addition, AST said it is eliminating 30 positions in other areas of the United States and overseas through a combination of layoffs and attrition, bringing the total work force reduction to 120.
As of Dec. 30, AST had 1,234 employees in Orange County and 2,025 workers worldwide.
Several workers on Tuesday said they expected the layoffs after AST announced earlier this month that it would report a sizable loss for its fiscal 1989 second quarter.
AST said it lost $8.9 million on revenue of $110.9 million for the three months. The company earned $2 million on revenue of $92.6 million in the year-ago quarter.
“There have been rumors for the last three weeks to a month about layoffs,” said Lloyd Allsopp, a worker at AST’s manufacturing facility in Irvine. Allsopp was not laid off.
AST’s announcement did not surprise Wall Street, either. Several high-tech firms have announced personnel cutbacks in the past few weeks, including Western Digital Corp. in Irvine and Wyse Technology in San Jose.
AST President Safi Qureshey was unavailable for comment.
About a third of AST’s second-quarter loss stems from a writedown of the recorded value of assets of the company’s Camintonn division, which makes products for systems compatible with Digital Equipment Corp. computers.
AST has said it would like to sell Camintonn. The company took the writedown, said Finance Vice President Jerry Ulrich, because AST believes that the price it eventually receives for Camintonn will be about $3 million below the stated value of the division’s assets.
Another $2.6-million loss reserve was booked in the second quarter to account for the cost of employee severance packages as well as a drop in the value of some of AST’s inventory.
The remainder of the loss was attributed to costly marketing strategies adopted by AST to try to keep its customers.
Times staff writer Lucille Renwick contributed to this report.
