Digital takes dollars 1.5bn charge

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The Independent Online
NEW YORK - Digital Equipment, the American computer maker that last week ousted its founder and chief executive, Kenneth Olsen, yesterday reported a loss of dollars 1.85bn ( pounds 974m) for the final quarter of its fiscal year, writes Larry Black.

The loss was caused mainly by a dollars 1.5bn restructuring charge, which followed a similar dollars 1.1bn charge for the same period last year. The result brought Digital's loss for the year to dollars 2.7bn, or dollars 22.39 a share. Last year, the second-ranking US computer maker lost dollars 617m, or dollars 7 a share.

In a statement released with the results, Mr Olsen blamed the loss on the economic slowdown, notably in Europe and Asia. Digital's sales in the quarter to 30 June fell to dollars 3.91bn from dollars 3.94bn, but the company said it sold more computers but at lower prices.

The company said revenue yield improved in the US and 'Europe seemed to be stabilising'. Non-US markets account for almost two- thirds of Digital's revenues.

Digital, which has staked its future on its new Alpha chip design, has been under severe pressure to cut its costs since April, when it declared an unexpectedly large loss.

Digital has made more than 23,000 employees redundant since 1989, bringing its global workforce down to 113,000.