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Compaq reorganizing notebook division

As it moves to integrate more of Digital Equipment's design team, Compaq will lay off an undisclosed number of staff in Houston.

Compaq is reorganizing its notebook PC operations in Houston as the company moves to integrate more of Digital Equipment's design team.

Though the No. 1 PC maker is not divulging the number of people being laid off, a company spokesperson said "it is a very small number."

At least one major competing notebook PC maker has been receiving resumes from employees at Compaq's notebook PC operations in Houston.

"As we announced last year, we're integrating the former Digital design team from Marlboro, Massachusetts, into the commercial portables division and as such, we're continuing to restructure our Houston notebook design team," the spokesperson said.

"This is business as usual?This is just part of the restructuring process that has been ongoing as a part of the Digital integration," the Compaq spokesperson added.

Compaq let go close to 1,000 manufacturing employees in its hometown of Houston in October of last year as part of the company's plan to streamline operations by 17,000. In June, Compaq said it would lay off 5,000 manufacturing employees and 17,000 in total.

Compaq acquired now-defunct Digital Equipment last year. Though Digital's Intel-based desktop PC business was an underperformer and its designs were lackluster, its portable PC products were well received in the market and its notebook design team created some head-turning designs over the years.

Digital, for example, was the first with a truly ultra-thin, ultra-light Windows 95 based notebook design. Back then it was called the HiNote Ultra--and lives on at Compaq at the Armada 6500. Compaq, however, said earlier this year it would terminate sales of the 6500 in the U.S. market.

Since the acquisition, Compaq has released a number of lighter, thinner designs including the Armada 3500 and the Presario 1900 series.

Compaq also continues to farm out much of its notebook production to Taiwan.