While the exact number of employees to be dismissed is not known, Compaq CEO Michael Capellas said last month as many as 8,000 layoffs are expected.
Sources close to Compaq said the ax will fall in many divisions. Areas likely to see layoffs are those groups that focus on small and medium businesses, the distribution/sales organization, and the enterprise and services group, which accounts for more than half of Compaq's revenue. Manufacturing operations and administration will be heavily hit in all areas.
Just a week ago, Compaq notified about 100 engineers at its Bellevue, Washington-based facility that they would be laid off next month. The pink slips touched off a week of confusion over continued Microsoft and Compaq support for Windows NT 4 and Windows 2000, the renamed Windows NT 5, on Compaq's Alpha processor.
Compaq acquired the Alpha technology when it bought Digital Equipment more than a year ago. Compaq had yet to issue a statement this morning or clarify the future of Windows NT and 2000 on Alpha.
The Houston, Texas-based PC manufacturer is expected to make a lot of hard decisions over the coming weeks as it refocuses on profits and unloads some former Digital units.
Compaq yesterday agreed to sell its AltaVista FireWall and AltaVista Tunnel security products to Axent Technologies. Axent will rename the products and also continue to develop them for Compaq.