Compaq issues warning, cuts 5,000 jobs

The cuts come as a result of "continued overall weakness in the US economy," said Michael Capellas, Compaq chairman and chief executive officer during a conference call. Though the consumer and business desktop PC market "has been hit the hardest," server and small business sales have dropped off as well, Capellas said. He did note, however, that Compaq continues to do well in the storage and Unix markets.

Compaq lowered its earnings outlook for its first fiscal quarter 2001 ending 31 March to a range of $US0.12 to $US0.14 per share, about even with the first fiscal quarter of 2000. Revenue is estimated to be between $US9.0 and $US9.2 billion, about 4 per cent below the same quarter last year. The prior consensus financial estimates of analysts for Compaq pegged the first quarter at $US0.18 per share on revenue of $US9.6 billion.

The company said it plans to eliminate about 5,000 positions, or 7 per cent of its workforce worldwide, primarily from the new Access unit formed by the consolidation of its consumer and commercial product groups, as well as jobs from the supply chain and marketing organisation. The company expects to save between $US500 million and $US600 million per year through the moves, Capellas said.

Compaq said it will take a restructuring charge of $US125 million to $US150 million in the first quarter resulting from the consolidation, while recognising about $US120 million from a one-time gain primarily from the sale of the company's investment in the Road Runner joint venture. The restructuring will be implemented in two phases, the first taking place over the next four to six weeks, the second over the balance of the year, Capellas said.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?