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Compaq Cuts More Jobs
In its second wave of staffing cuts this year, Compaq Computer said Tuesday it was laying off 4,000 more workers, bringing the total number of employees it plans to terminate this year to 8,500, or about 12% of its work force.
The announcement, made after trading closed on the New York Stock Exchange, came as the Houston-based company assured investors its second-quarter earnings will meet the Thomson Financial/First Call analysts' consensus of 4 cents per share.
The computer maker blamed worsening economic conditions and intensifying price wars in Europe, particularly in the United Kingdom, Germany and Switzerland.
Second-quarter revenues will drop to $8.4 billion, short of the $9 billion the company projected earlier this year and a 17% drop from $10.13 billion in revenue in the year-ago quarter, Compaq said.
Compaq will take a restructuring charge of about $490 million in the second quarter, which it said was mostly related to job cuts. The company is expected to save $900 million annually from the total reductions.
Compaq had previously said it planned to eliminate 7,000 jobs this year, with 2,500 jobs cut through attrition and the remainder through layoffs.
During a conference call Tuesday, however, Compaq said all the cuts will be through layoffs.
So far, Compaq has cut 3,500 jobs in a restructuring program announced earlier this year, with 1,000 more anticipated in Houston and Erskine, Scotland. Before Compaq started trimming its work force, it employed 71,300 people.
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