HOUSTON — Compaq Computer Corp. hoped natural attrition would allow it to shave 2,500 jobs — in addition to 4,500 layoffs — when it announced it was restructuring earlier this year.
But a sour economy, particularly in the tech sector, meant Compaq workers had no place to go. So the Houston-based computer maker said Tuesday it will terminate 4,000 more workers instead.
"Given the weak worldwide economy, our attrition has been lower than expected, so we have accelerated the process by including these positions in the latest charge," Compaq chief financial officer Jeff Clarke said.
Compaq will take a restructuring charge of about $490 million in the second quarter, which it said was mostly related to job cuts. The company is expected to save $900 million annually from the total reduction of 8,500 jobs, approximately 12 percent of the work force in early 2001.
So far, Compaq has laid off 3,500 workers from the initial round of cuts. Clarke said the remaining 1,000 terminations from the first wave mostly will come in Houston and Erskine, Scotland.
Along with the job cuts, Compaq announced it will meet Wall Street's second-quarter expected earnings of 4 cents per share but will bring in only $8.4 billion in revenue, short of a projected $9 billion and a 17 percent plunge from $10.13 billion in the year-ago quarter.