Compaq Computer to Lay Off 1,000 Workers
Compaq Computer Corp. will cut 1,000 employees, or about 10% of its worldwide work force, because of fierce computer industry competition, the company said in statement released Wednesday.
The Houston-based personal computer maker also said it will take about $85 million in restructuring and other special charges in the third quarter, but added that the charges will be offset by a third-quarter gain of about $86 million on the sale of the company’s equity interest in Conner Peripherals.
Results will be released on Oct. 20.
Compaq officials said the company’s operating earnings for the third quarter are “comfortably above” second-quarter levels this year, when Compaq earned $29 million, or 35 cents per share.
Compaq lost $70 million, or 82 cents a share, in the third quarter of 1991.
The company, with about 10,000 worldwide workers, said it would begin laying off 700 workers this month, but made no mention of where the layoffs would occur.
The statement originally was intended for release this morning. Company officials could not be reached for comment.
The announcement was released after the close of financial markets late Wednesday. Compaq stock lost 75 cents a share Wednesday on the New York Stock Exchange, closing at $33.50.
Company officials said they will announce “record revenues and unit shipments” for the third quarter when they release the company’s financial data in two weeks.
Compaq has shipped an “unprecedented” number of computers during the quarter and has entered the fourth quarter with a strong backlog, the company said.
“In addition to the successes of our new products and programs, Compaq has made great strides in achieving substantially improved product and operating cost efficiencies,” Eckhard Pfeiffer, Compaq’s president and chief executive, said in the statement.
But Pfeiffer said a “continuing intensely competitive market environment” made the work force cuts necessary.
Laid-off employees will be offered a severance package and placement help, the company said.
Houston-based Compaq reported 1991 revenue of $3.3 billion.
