Kingston Technology Lays Off 19 Employees

Kingston Technology Co. Inc., which drew national attention for its generous bonuses to employees, said Tuesday that it has laid off 19 workers in consolidating its sales staff amid a softening market for personal computers.

The layoffs represent only a fraction of the Fountain Valley company’s global work force of 2,200, but they are the first in the company’s 14-year history.

The maker of memory products merged three teams that sold different components and ended up with overlapping positions. The company tried to place extra salespeople in other areas, said Wai Szeto, Kingston’s vice president for strategic development, “but some of those people were just interested in sales.”

Szeto said the decision to lay off the workers was “painful for us.” Those dismissed will receive severance pay and other benefits, he said. He wouldn’t provide further details.

Kingston entered labor folklore by providing employees with a $100-million bonus package in 1996 when founders John Tu and David Sun sold the company for $1.5 billion. For the past four years, the company has been named to Fortune magazine’s list of the top 100 firms to work for.

But a number of computer makers have been affected by a broadening slowdown in the economy and have reduced orders for components, cut other expenses and laid off workers. Many have said that earnings and sales this year will be less than initially forecast.

Santa Clara, Calif., chip maker Intel Corp., which has two major contracts with Kingston, said last month that it has cut back on spending and hiring.

Given the sluggish growth in personal computer sales and slower overall growth in the U.S. economy, Kingston found that orders for memory products from computer makers were slowing down.

With annual sales of more than $1.5 billion, Kingston is the world’s largest independent third-party manufacturer of computer memory modules.