April 2, 1997 12:45 PM PST

Digital announces reorg

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February 14, 1997
Digital Equipment (DEC), faced with declining financial performance, today said it would restructure its operations in an effort to bolster marketing and bring its corporate strategy more into focus.

Digital will move some of its business units into a functional management structure by combining the sales and marketing of its personal computer and systems business units into one organization.

Bruce Claflin, currently the vice president and general manager of the company's personal computer unit, will head the new unit.

Meanwhile, all product-related activities will be shifted to the newly created digital products division. Harry Copperman, who currently serves as vice president and general manager of the systems business unit, will oversee operations.

"The Digital growth strategy is based on one mission of delivering with our partners networked business solutions based on high-performance platforms and services," said Robert B. Palmer, Digital chairman, in a statement. "The changes announced today put us in a stronger postion to execute against this strategy."

The worldwide sales and marketing organization will focus on offering customers fully integrated solutions while the digital products division will place products built on Intel and Alpha architectures under one roof.

Digital, however, will retain its semiconductor and network product business units, which will report to Copperman.

Both Copperman and Claflin will continue to report to Palmer; the changes will take effect July 1.

In a separate announcement, Digital reported that Charles Christ, vice president and general manager of the components division, plans to retire on July 1.

The company has reported declining year-to-year revenues and profits for the past three consecutive quarters. Digital's second quarter, ending December 31, saw a 15 percent drop in revenues, to nearly $3.4 billion, and a whopping 78 percent drop in net profits to $31.9 million.

Analysts applaud the move.

"I think the realignment is more logical, but whether it makes a huge difference depends on how they execute," said David Wu, an analyst with the Chicago Corporation.

 

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