AST Begins Cutting Work Force in Europe

AST Research Inc. said Tuesday that it is slashing its European work force, selling its plant in Ireland and focusing its sales effort solely on its notebook computers as it struggles to return to profitability.

The reduced operation is part of AST’s plan to focus on U.S. sales this year, said spokeswoman Camerone Welch-Thorson.

The Irvine computer maker, owned by South Korean conglomerate Samsung Electronics Corp., said the changes are part of the 37% reduction in AST’s worldwide work force announced in early December.

At the time the company announced its overall staff cuts of 1,100, AST included estimated job cuts in Europe. But the company had not completed plans for reorganizing the European operations.

Though exact numbers still aren’t available, an estimated half of the 600 jobs with the company’s subsidiary, AST Europe, will be cut.

The European operation will stop selling its desktop computers and servers, marketing only the laptops, which provide the company with a higher profit margin.

The notebooks are made by Samsung but will be sold under the more well-known AST brand, said Tom Scott, senior vice president for sales and marketing.

AST also will pull out of the less profitable Scandinavian and East European countries and concentrate its sales in England, France, Spain, Italy and Germany, he said.

“The idea is to get operations realigned and profitable and then grow the business,” he said.

The company said in December that it is pulling out of poor-performing areas worldwide, including Southeast Asia and Australia, in favor of a bigger effort in its stronger markets.

In Europe, AST won’t abandon the northern and eastern countries. Scott said that service and support will continue to be available to customers in those countries and that AST hopes to send sales and marketing people back to those countries within a year.

The biggest cuts will come in Limerick, Ireland, where AST has sold its plant to Dell Computer Corp. and will move at the end of March to smaller quarters nearby. The plant employs 430, and most will stay with Dell, Scott said. AST’s new plant will employ 135, consisting of both old and new employees.

AST Europe’s headquarters in London, which once employed 130 people, will end up with 28 employees.