Compaq slashes 1,600 jobs in Singapore

Compaq Computer today announced it would lay off 1,600 people at
its Yishun, Singapore, facility.


As previously reported, Compaq was expected to hand out more pink slips today as part of an ongoing restructuring, said sources close to the company. Compaq chief executive Michael Capellas said last month as many as 8,000 layoffs are expected.

The Singapore facility assembles about 90 percent of the Intel-based PCA
(printed circuit assembly) boards used by Compaq, which are then shipped to
facilities in Scotland and North America. Compaq will instead outsource
board assembly to regional partners.

"This is part of our ongoing effort to radically simplify the total supply
chain," said Alan Hodel, Compaq spokesperson. "Outsourcing the Intel boards
to regional PCA-alliance partners is going to shorten the supply chain and
help the company more efficiently configure-to-order."

Compaq has yet to choose any partners but is talking to companies in
several geographic areas worldwide.

This isn't the first time Compaq closed a PCA operation. Compaq in June 1998
ceased all PCA board assembly at its Houston manufacturing facility in a
shakeout that cost 5,000 jobs worldwide, including some in Singapore. Compaq
eventually cut 17,000 jobs as a result of acquiring Digital Equipment earlier
that month.

Compaq notified employees late Wednesday of the impending Yishun layoffs but waited until today to make them public.

About 1,000 workers will stay on at the facility, which will continue to serve as a regional fulfillment center for PC systems and servers.

Compaq expects to begin actual layoffs in the fourth quarter and complete them by March. The timetable is flexible and depends in part on Compaq's
progress finding the right companies to outsource board assembly to.

Compaq will work with the Ministry of Manpower, the Singapore National
Employer's Federation and other organizations to place former employees in new jobs.