Tandon Cuts 20% of Its U.S. Work Force

Tandon Corp., a struggling personal computer maker, slashed its U.S. work force by 20% on Friday, laying off 130 of its 650 domestic employees.

Most of the layoffs occurred in Moorpark, Calif., where the company is based, and affected nearly every division of the company, including manufacturing, engineering and administration, said Tandon spokesman Mike Sanders.

Tandon said it needs the cost savings to effectively compete in the personal computer market in Europe, where Tandon’s sales are concentrated. Tandon’s worldwide employment, after the layoffs, is now about 1,300, with most of those workers located in Europe.

The cost savings are particularly important in light of the company’s dismal fourth quarter last year, Sanders acknowledged. Tandon lost $21.1 million in the quarter ended Dec. 31, which led to a $19.9-million loss for the year. The company’s sales last year rose 7% to $309.3 million.

“You can’t downplay our loss for the year,” Sanders said. “Based on that, the company has to get more cost-effective. The whole worldwide (personal computer) market is getting more intensely competitive.”

After its founding in 1975 by India native Sirjang Lal (Jugi) Tandon, Tandon became one of the computer industry’s best-known suppliers of disk drives, which store and retrieve data inside personal computers. But the company, hurt by a severe downturn in the overall computer industry and strong competition, lost nearly $200 million in 1985-86.

In 1986, Tandon decided to sell personal computers itself, and a year ago the company sold its data-storage business to Irvine-based Western Digital.

With those changes behind it, Tandon was again profitable through much of 1988. But the profit evaporated with the fourth-quarter loss, which Tandon blamed on shortages of semiconductors used in personal computers, as well as heavy marketing and advertising costs related to its push to expand European sales.

Tandon’s stock closed Friday at 87.5 cents a share, up 6.25 cents, in over-the-counter trading after the company’s announcement.