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CHEAP COMPUTERS FORCE LAYOFFS IN ONCE-BOOMING INDUSTRY

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The glamour is fading from the computer industry at the close of the 1980s, tarnishing one of the most remarkable success stories of American business.

The computer industry has behaved more like the auto or steel businesses this year, with numerous layoffs and other job reductions. While sales continue to rise, the single-digit growth is a comedown for an industry that was accustomed to bounding gains early in the decade.The latest evidence came Tuesday, when International Business Machines Corp., the world's biggest computer company, announced it would cut 10,000 U.S. jobs without layoffs because of slow growth in its home market.

IBM and independent analysts cite several reasons, including an economic slowdown and sluggish capital spending by American companies.

But one of the biggest factors is that computer makers have worked their way out of sales. They have made machines so cheap and powerful that customers no longer need to shell out millions of dollars to get a job done. They can get by with spending a tenth or a hundredth as much.

There are some winners in this transformation: the makers of personal computers and engineering "workstations," such as Compaq Computer Corp., Apple Computer Inc. and Sun Microsystems Inc.

The losers are companies that get most of their profit from bigger, costlier computers, including IBM, Digital Equipment Corp., Unisys Corp., Control Data Corp., Amdahl Corp., Bull HN Information Systems Inc., Wang Laboratories Inc. and Prime Computer Inc.

All those companies have cut jobs this year, through layoffs or voluntary resignations and retirements. Their machines can't match personal computers for the combination of low price and high speed.

Personal computers won't take over entirely. Big mainframe computers remain irreplaceable for jobs such as controlling access to vast reservoirs of data and handling complex computing jobs that can't be split up among several smaller machines. Minicomputers, which lie between mainframes and personal computers, also have a valuable role in many corporations.

But more and more, personal computers are doing jobs that once were the exclusive reserve of bigger machines.

"The little guys are just creeping up everywhere, and they're stealing their way into niches all over the place," said Doug Crook, a Dataquest Inc. analyst.

All this is good for customers but bad for traditional computer makers. IBM is a major factor in the personal computer market but makes very thin profit margins in that business, in contrast to its fat profits from its dominant market position in mainframe computers.

Digital Equipment is in a similar bind. This year, it introduced a speedy computer workstation to compete with companies like Sun Microsystems. The machine is so fast it threatens to cannibalize Digital's own sales of its bread-and-butter Vax large-computer line.

The danger to mainframes and minicomputers was obscured early in the decade by the industry's overall growth. With expansion slowing, the threat from personal computers is clearly delineated.

IBM said Tuesday its business was stronger in Europe and Asia than in the United States. One reason may be that personal computers are not as popular abroad. Once PCs catch on abroad, they may sap strength from those markets for bigger computers as they did in this country, said Don Bellomy, an International Data Corp. analyst.

Bellomy's company is projecting an 8 percent increase in U.S. sales of computers next year, about even with 7 percent this year but far less than the 30 percent a year in 1982 through 1984.

The scope of the difficulties is reflected in job figures. According to the Bureau of Labor Statistics, computer industry employment in September was just under 420,000. While that is about the same as the last few years, it is down sharply from 471,000 in September 1984, the industry's last boom year.