Compaq Computer Corporation has announced plans to cut 5,000 jobs - 7% of its global workforce - as it lowered its first quarter 2001 earnings outlook to 12-14 cents a share.
Wall Street analysts had expected Compaq - which employs 2,200 people in Dublin, Galway and Belfast - to earn 18 cents a share in the first quarter. The company's Irish operation could lose 140 staff if it takes its share of job losses.
Compaq said it planned to eliminate about 5,000 jobs as part of a package of measures expected to save between $500m and $600m a year.
But company officials have declined to give specific information about which facilities will be affected until the details have been worked out. That news is expected some time in April when the company's first quarter results are issued.
Compaq's operations in Ireland mainly consist of sales and technical support as well as software development. A spokesman for the company said he believed the Irish operations will not be as hard hit as manufacturing plants elsewhere but could not give any definite answers as to the location and number of the job losses.
Explaining the lower earnings forecast, chairman Michael Capellas said: 'We see continued weakness in the US economy and resultant pricing pressures.'
The company expected first quarter sales of $9bn to $9.2bn, down 4% from the same quarter of 2000.
Compaq will also merge its commercial and personal computer operations and take steps to reduce the time it takes to fill orders. Compaq will absorb a restructuring charge of $125m to $150m in the first quarter to cover the changes.
