Digital Retrenching, Offers Volunteer Severance Plan

Digital Equipment Corp. said today it is planning to offer a voluntary severance package to between 5,000 and 8,000 of its employees in coming weeks and that it is considering further plant consolidation.

Digital officials said last month that the company could post the first quarterly loss in its 32-year history in its third fiscal quarter, which ends March 31, and that it has been considering various cutbacks.

The No. 2 computer maker, which has 125,900 employees, said its plans do not call for any forced layoffs.

“Everything is being looked at,” said Brad Allen, a Digital investor relations officer, adding that the reductions and any plant closings will be “concentrated only in the U.S.”

Allen said that the plan, in which certain of its employees will be offered a generous severance package to leave the company, has not been completed but has been getting “increasing momentum.”

“They’ll be getting incentive offers which will provide several options, one of which is to leave the company,” said Allen, who said the company is not planning outright layoffs.

Allen said the plan is likely to be offered beginning in the next several weeks, but would not be concluded in the third quarter and that it is doubtful at this point that the company will take a third-quarter charge to pay for the plan.

The company, ranked second only to International Business Machines Corp. among the nation’s computer makers, has found increasing competition to the VAX mid-sized computers that have been its main product.

It has been unable to make big gains in either the large-sized mainframe or personal computer categories to make up for the gains other computer makers have made in its mid-sized category.