Industry Slump Prompts Diceon to Lay Off 225
Hurt by a slowdown in the computer industry, electronics-board maker Diceon Electronics Inc. said Monday that it will realign manufacturing operations and lay off about 15% of its 1,500 employees.
The company will lay off up to 225 workers, mainly at its operation in Chatsworth, Vice Chairman Peter Jonas said. The company will also consolidate several plants in Northern California into its Mountain View office, Jonas said.
Diceon expects the realignment to result in a one-time charge to 1990 earnings of about $5 million.
The announcement drove the company’s stock down. It closed at $2.50, down 50 cents to a low for the year, in trading on the New York Stock Exchange.
Diceon officials said the changes are in line with the firm’s plan to use its resources more competitively. “We’re adjusting to become a world-class manufacturing company with less people, less space and more production,” Jonas said.
The company will close two of four buildings in Chatsworth in an effort to more efficiently produce its circuit boards and electronic assemblies for minicomputers, mainframes and telecommunications gear.
The Chatsworth layoffs are effective in 60 days, but those elsewhere are immediate, Jonas said.
In Northern California, Diceon will lay off 40 people and close plants in Palo Alto and Redwood City. In Irvine, the company’s 500-employee operation will have a small number of layoffs, but Jonas said the bulk of the layoffs will be in Chatsworth.
The Irvine plant will expand its manufacturing to include small-scale and prototype production as well as mass production. Robert Sullivan, an analyst at PaineWebber Inc. in New York, said consolidation is necessary because the company was faced with excess capacity, an increasingly competitive market and continuing losses.
Sullivan said he expects the company to report a loss of about $10.7 million for the year, adjusted for the $5-million writeoff.
Diceon reported a loss of $2.4 million for its third fiscal quarter ended June 30, compared to a loss of $1.1 million a year earlier. Revenue rose 14% to $31.7 million from $27.7 million for the period.
