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COMPUTER FIRM WILL HAVE TO KEEP CUTTING WORK FORCE

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Digital Equipment Corp. said it has cut 3,700 jobs through a voluntary retirement program and expects to resume layoffs in July to reduce costs and strive for profitability.

Some analysts said they expect Digital's losses to continue through the end of this year.Digital, the world's second-largest computer company behind International Business Machines Corp., has eliminated more than 23,000 jobs the past couple of years through voluntary departures and layoffs.

"They're finding that each time they've made cuts, they have to make more cuts," said Laura Conigliaro, an analyst with Prudential Securities in New York.

Digital, based in Maynard, offered early retirement to 7,200 employees, and 3,700 accepted. That reduced the company's work force to about 112,000, which includes about 10,000 employees added to the payroll through recent acquisitions.

Digital officials have already said the company expects to take a restructuring charge up to $1 billion in the fourth quarter, which ends this month, to pay for further job cuts.

Dallas Kirk, a Digital spokesman, said the next round of cutbacks are being planned, and they are expected to begin after the start of the new fiscal year in July.

Kirk said those cuts likely would involve layoffs.

Several analysts said they expect Digital to eliminate at least 10,000 more jobs and that more cuts may be needed. "This may not be the end of it," said Shao Wang, an analyst with Smith Barney Harris Upham & Co. Inc. in New York.

In its most recent quarter, Digital lost $294 million. David Wu, an analyst with S.G. Warburg & Co. in New York, said he didn't expect Digital to show profits until early 1993, after the company slashes more from its payroll and sees the economy improve.

Digital not only faces a sluggish economy that has hurt demand for other computermakers, but it also feels pressure as it undergoes major transitions.

Digital's traditional VAX line of computers lost ground in a market where customers could buy cheaper, faster machines that could work with computers made by different companies.

The company hopes to regain the technology lead and boost sales with a new line of computers based on a high-powered chip called Alpha. But those machines aren't expected to be shipped in significant volume until early next year.

Wes Melling, an analyst with Gartner Group in Stamford, Conn., said Digital has a sound product strategy, but the company continues to have trouble communicating that strategy to its sales force.