Compaq Announces Loss of $135 Million, Job Cuts

Hurt by a weak economy and tough competition, Compaq Computer Corp. posted a big third-quarter loss Wednesday and said it will slash about 1,400 jobs as part of a major restructuring.

The Houston-based personal computer maker said the one-time cost of the reorganization--$135 million--caused it to post a loss of $70.3 million, or 82 cents a share, for the quarter ended Sept. 30. That contrasts with a profit of $123.6 million, or $1.38 a share, in the year-ago period.

Revenue slid nearly 18% to $709.4 million from $863.0 million.

Compaq said the restructuring will include a 12% cut in its worldwide work force. The company, which employs 12,000, offered few details of how it plans to cut jobs.

“With third-quarter revenue still reflecting continuing softness in world economies, an ongoing slowdown in the personal computer industry and a period of intense price competition, we have determined that a change in our cost structure is essential,” Compaq President Rod Canion said.