Conference 7.286::digital

    A layoff of that size would cripple our ability to do business.
    Even 30,000 would require that we completely give up some of
    current operations and abandon certain markets...mwr

    what was the largest ever layoff made in recent history in the US
    from a private company?
    i.e. What is the outstanding record ?
    /Nasser

    I can already see a side-effect happening, but it won't sink in for about
    six months. We are losing a mammoth investment in acquired knowledge.
    
    There is near to no planning for continuing workers, to pick up the
    responsibilities, training, or expertise of those departing.I wen't to
    ask a fellow engineer if I could "borrow" some code that I new he had
    done. He had been TFSO'd, His boss and his bosses boss, had serped, and
    about 30% of their group had gone. When I finally got through to
    someone, I found that his account had been archived to tape, and sorry,
    but they were too busy to pull what I needed off them. I spent a couple
    of days re-inventing a wheel. No doubt those tapes will be recycled
    soon, and we will have lost just one case of manyears of effort. Repeat
    this several thousand times...
    
    q
    

    I have no idea as to how accuraate a tv news story might be, but I do
    know that I wouldn't take stories of 45% of the company being laid off
    seriously until Bob Palmer says so. Anyhow unless we merged with another
    company it wouldn't make sense.
    
    Don't lose sleep.
    
    /andy

    Last night's Channel 7 News also speculated that layoffs could go 
    as high as 50,000.  Supposedly the information came from a "top
    executive" at Digital.  I'm just wondering who *that*
    might be...
    
    And I'm thinking the same way the rest of you are ... a number 
    that high would bring us to a halt.  15,000 would be bad enough.
    
    And, it's interesting that someone (-.1?) speculated that the numbers
    wouldn't go that high unless we merged with another company given
    the recent flurry of rumors of an HP/DEC merger.
    
    -j

    
�    Last night's Channel 7 News also speculated that layoffs could go 
�    as high as 50,000.  Supposedly the information came from a "top
�    executive" at Digital.  I'm just wondering who *that*
�    might be...
     
     I heard that report, and it sounded to me like Ch. 7 was taking a
     lot of leeway with what the "top executive" said.  It sounded like
     the exec said our revenue/employee was half what it should be, and
     the reporter translated that into a layoff of about half our workforce.
    
     - Sean 

    Re .06...
    
    You're probably right... they *did* report the revenue/person exactly 
    as you say.  And an aggressive reporter might have, in the interest
    of making the story more sensational, interpreted the statistic
    just that way.  There's *always* a way to turn a statistic around.
    
    It's funny that I've ended up watching Channel 7 for most of this
    unfolding story, because I *usually* watch Channel 4.  And I'm
    wondering if Ch7 typically "stretchs" a story for sensational value, 
    as their usual style of reporting.  Like the Herald .vs. the Globe.

    A layoff of 50,000 is consistent with the "small" view of the future of
    Digital that I predicted.
    
    A much, much smaller company that has abandoned its role as an
    alternative to IBM to HP, Apple, Sun, and Microsoft.
    
    This smaller company will have better people, a better focus,  better
    management, better management systems, and, at least, be profitable.

    Re .2
    I'd guess that IBM holds the current record for total number of people
    'downsized'. I read somewhere just in the last few days that they have
    slimmed down by 85,000 employees over the last two or three years! 
    
    Harry
    

    
    
    Did it o
    
    
    
       ccur to anyone here that the 50,000 figure may have been "leakeed Did it od

    and when 20,000 are let go then people will say whew" it was't 50

	Maybe they will let go all of Financial, Legal and Personnel, and 
contract thoes functions to outside firms? Couldn't hurt.

re: .8, Pat Sweeney

>    A much, much smaller company that has abandoned its role as an
>    alternative to IBM to HP, Apple, Sun, and Microsoft.

If this is actually a goal, they could make things so much easier by just
announcing the intention. I'm sure they could easily find several tens of
thousands of us more than willing to leave if we don't intend to be a leading
supplier of "product" anymore.

re: .-1

I would think that contracting out for Legal would be pretty risky for a
company even a quarter of our size. Likewise for many of the finance functions.

-Jack

    
    Ron Skates, a Price-Waterhouse accountant, took over Data General in
    1990 after the ouster of founder Ed DeCastro.  Skates promised the
    board that DG would be profitable in two years.
    
    Skates delivered on his promise - DG showed a profit after four years
    of hemmoraging money - but the work force had been slashed from 17,500
    to around 9000.
    
    Skates had in fact slashed away most of the company's ability to
    produce new products and support old ones.  DG now is ekeing out a near
    anonymous existence building mediocre Unix boxes and trying desperately
    to hang onto their existing customer base.  Skates' profit lasted one
    entire quarter, if memory serves me.  Morale is so poor that many
    people are anxious to be fired so that they can at least get a few
    bucks from the 'package' in their pocket.
    
    Ed
    
    

    You would prefer what?
    
    (a) a break-up of the company and a sell-off of the parts
    
    (b) continuation of the same course and bankruptcy coming a bit more
    quickly
    
    I can't imagine a scenario that would have supported DG in its old
    form.  At least Digital has Alpha as its great and final hope.

    
    re. 13
    
    	Digital ALREADY contracts out some legal work.
    
    
    		fred deady
    		wbc::deady

    
    re: .1
    
    >>	A layoff of that size would cripple our ability to do business.
    >>  Even 30,000 would require that we completely give up some of
    >>  current operations and abandon certain markets...mwr
    
    
    this attitude may be at the core of our problem.  there are many
    jobs that have been created during the decade of good times 
    that are unnecessary, even in good times.  many of these jobs 
    are gate keepers only; they do not contribute to the bottom
    line, but act as checkpoints before the productive workers can
    proceed.  
    
    i don't know if there are 30,000 of these non-contributory 
    gatekeepers at dec, but i do know that hewlett packard is very 
    productive - just ask any sales person who has competed against 
    them or any of their customers who is more than satisfied with 
    their support - at only 85,000 people.  oh, yes, they have 
    passed us in total revenue.
    
    ask yourself again if you are doing a job that contributes to dec's
    success.  
    
    ??

    re: .14
    
    >>Morale is so poor that many people are anxious to be fired so
    >>that they can at least get a few bucks from the 'package' in
    >>their pocket.
    
    This is as much a description of some folks at Digital, as it
    is of the DG workforce.
    
    re:  earlier reference to Microsoft:  They do what they do with
    significantly fewer people than the conservative (?) 20,000 that
    Digital is talking about laying off. Whose stock would you rather
    have owned for the past 5 years?
    
    Digital can either reinvent itself or be Wanged by the realities of the
    marketplace.
    
    	-doug
    
    
    
    
     

re: .16, Fred
    
>    	Digital ALREADY contracts out some legal work.

I'm sure that's true.

-Jack

.17>                                       Many of these jobs 
.17> are gate keepers only; they do not contribute to the bottom
.17> line, but act as checkpoints before the productive workers can
.17> proceed.         ^^^^^^^^^^^
    
    Based on consistent personal experience, especially in the last 6-12
    months, I think the word I would suggest in that sentence is spelled
    "roadblocks".
    
    Jon

    RE: .9 Harry-read the note on IBM a few notes back.  This downsizing
    took 6 years and was the result of volutary severance packages and
    attrition if the article is true.
    
    
    Mike

    Janet,
    
    Gotta be careful when listening to local news spots on DEC. I heard one
    over the weekend that said our losses for the last QUARTER would be 2
    billion.
    
    Gregg

    Heaven help us if Digital starts massive contracting out of certain
    functions.  We already contract out STD services--it took me 9 weeks
    to sort out missing paychecks after I returned to work (as did 3 other 
    people in my organization after also returning from STD).

>>    Gotta be careful when listening to local news spots on DEC. I heard one
>>    over the weekend that said our losses for the last QUARTER would be 2
>>    billion.
  

Well, we've been hearing similar numbers, though about $1.5B of that is 
supposed to be restructuring charges.  Still, the numbers are mind-blowing.

    DEC in the UK has already contracted out our Logistics operations,
    (spare parts for engineers), and Facilities management, (building -
    - maintenance), is next!
    
    Are any of our jobs safe?
    
    Mark.

At this point, I would use HP as a model for the new Digital.  We are just 
not in IBM's league in terms of size and scope   The notes I read here and 
other related notes files seems to indicate that the transition for HP was
very painful but seems to have had results.  So turnaround is possible.

Losing 20-50k workers seems incredible but certainly possible.  Especially
if the Digital doesn't recover and continues it's death spiral.  Both Wang 
DG are proof of that.   December isn't that far away... 

Some questions I have and have no answers for:

Is there really 20-50k workers of overhead in this company?
It's hard to believe.

It seems 20-50k losses would include substantial losses in "worker bees"
and require strong re-focusing of our efforts.  Our ability to provide a
"full service" solution would seem impractical.

What could be some of these limiting possibilities?

Do we just concentrate on hardware again and run multiple OS'S (of which 
VMS would be one of several choices?).

Do we concentrate on very specific software "middleware" where we have some
expertise. such as networking and connectivity software.  This would cede
significant software developments to third parties and other software vendors?

Do we just concentrate on "hot boxes" and cede periperals and supporting
hardware (disk drives, tape drives etc.) to third party and other vendors?

Do we just concentrate on the "integration" business and severely limit
further significant efforts in both hardware and software?

There is definitely serious money to be made in all of these areas, but I 
question whether we can address them all in our current climate.

Maybe (hopefully) I'm just being overly grim.  Maybe a new Digital will spring
like a phoenix from the old Digital.  But I personally do not have a firm
footing on the way to go...

		Bob Cohen

That size cut would certainly make it necessary for us to decide finally what
business(es) we're in.  

\dave

    re .17 <oh yes, they have passed us in total revenue>
    
    
    Presumably you are suggesting that we should have a strategy 
    similar to HP's, eg:
    
    1. Create a broader products range of non-computer products 
       to give a revenue protfolio of:
               Medical, Analytical, components   12%
               Test and Measurement              12%
               PCs                                4%
               Peripherals and Comms             30%
               EDP service                       21%
               Computer processors               21%
    
    2. Concentrate on being a product-only company, with all
       other offerings being subservient to that end, eg Services
    
    3. Have a large part of your revenue dependent on a single product, a
       printer, which is subject to intense competition from people who
       will be able to manufacture it far cheaper than you can.    
    
    4. Avoid large projects, systems integration and solution-selling
    
    5. Dramatically reduce the salesforce and promote 3rd-party sales
       heavily.
    
    6. Maintain a skeleton number of account teams for the really major
       global customers who demand this level of support.
       
    
    Maybe you _are_ right in suggesting a "me-too" strategy; maybe not. 
    
    The main thing to remember is that HP "took their market medicine" 
    2 years ahead of their competitors (including Digital and IBM) and are 
    currently showing up strongly in comparison. They have always had quality 
    products and people.
    
    
    BTW going this route implies that:
    
     		a. you want Digital to be a product-only supplier
    
                b. you are willing for Digital to dispose of some
                   30-40,000 people, to get to the level that a
                   product-supply-only company would need.
    
    Tough times ! 
    
    
    John

re: .28

No, personal empowerment aside, I'm just a "worker bee".  I'm still waiting
for the phone call from Bob Palmer so he can ask my opinion on matters 8^)... 

While conceivably we could "limp" along with business as usual after layoffs
of 10k, it's doesn't sound like that what's desired.

No I'm assuming the "10-50k" layoffs that are coming will NOT be just 
overhead and deadwood but will force some re-evaluation of our basic 
businesses.   If HP is not a model, what is?  Are we that unique a company?

		Bob Cohen

Re 50,000:

"50,000" sounds an awful like "15,000."  It's not impossible that someone heard
of projected losses and "15,000" and thought they heard the greater number.  
After all ... what's 35,000 among friends? :-)

Sometimes figures are also the basis of analysts' speculations.

Steve Kallis, Jr.

re .17

>>    ask yourself again if you are doing a job that contributes to dec's
>>    success.  

Excellent Point.  That's exactly the question I keep asking myself all the time.
If the answer comes up NO, then it's time to find or make a position that does
contribute.

Sad to say, I've seen some who contribute little, directly or indirectly, to the
corporation's profitability but do spend a great deal of effort on the 
cosmetics of making themselves look good enough to keep around.  How many
thousands of hours have already been spent on multicolored, computer generated
high resolution slides for one-time internal presentations when a hand written 
transparency which only took a few minutes to make would have done the same job?

When you look at what you do, just ask yourself... "Where's the Beef"?  If 
your answer is that you've got a veggie sub with no mustard and diet mayo, then 
maybe it's time for a new sandwich... know what I mean?  But if you've got a 
roast beef on rye with kraut'n dill pickles the PLEASE keep plugging!

(sorry if the metaphor offended any vegitarians)

-dave (whose_got_to_get_back_to_work)

    
    re. 30
    
    I watched and taped the news story on Channel 7 Friday night since
    they kept advertising the "Inside Story at DEC".  They did indeed
    say 50,000 BUT than again we watched the news on Channel 56 at 10
    and they said 20,000.

It's been my experience that workplace overhead always expands to exceed
the capacity offered by the available workforce.  The only way I've ever
seen that's at all effective at cutting workplace overhead is to eliminate
the opportunity to create new overhead.

If Digital were to cut the correct 10,000 people, it could well have the
immediate effect of increasing the productivity of the remaining people
without requiring them to work any more hours than they do now.  Why would
I say that?

Well, when 10% of the people around you disappear, there's more work to do. 
If your head's screwed on straight, you do triage on what they say needs to
be done, and you focus on those things that are most important.  With a
decent set of priorities, you lose those things that were previously
considered important, but now seem unnecessary.

For all the potential for pain and suffering that's coming out of these
rounds of layoffs that we've been through or are going to go through, I
would hope that at the very least, whoever's left over takes this as an
opportunity to realistically review their priorities and get back to what's
really important.  10% layoffs followed by an attempt at business as usual,
but with fewer people, will almost certainly leave the company in the same
state it was in before, which is ever dwindling in size.  It's important to
remember that our current "business as usual" isn't working, therefore
shouldn't be continued.

The trick, of course, is figuring out which 10,000 people to get rid of,
and which pieces of our "business as usual" should be kept or discarded. 
Given that many of the organizations (engineering) that I've worked in at
DEC have rewarded political expertise more than technical ability, it's
pretty reasonable to expect that there will be at least as many "bad"
layoffs as good in this round, and that many departments still won't get
the message.

>If Digital were to cut the correct 10,000 people, it could well have the
>immediate effect of increasing the productivity of the remaining people
>without requiring them to work any more hours than they do now.  Why would
>I say that?

The correct 10,000 would probibly less the amount of work to do... A lot of
overhead positions justify their existance by some task that requires work of
others but produces little to no benefit. (see my comments on re-orgs below)

>10% layoffs followed by an attempt at business as usual,
>but with fewer people, will almost certainly leave the company in the same
>state it was in before, which is ever dwindling in size.  It's important to
>remember that our current "business as usual" isn't working, therefore
>shouldn't be continued.

Of course it will mean that I will go through another re-org and probibly my 6th
manager in the last 13 months. I guess I can't complain, I kept the same manager
through the last re-org. Every re-org requires a transistion meeting (2 hours 
min) for everyone being moved and then relearning how your new manager wants
things done. The managers (first level) have it even harder. I am in the field
and the time lost could be billed... 

Layoff everyone who ordered a re-org in the last 2 years and you would probibly
get 10,000 right there. With my luck, my management will read this and decide 
I'm expendable, after all I'm only a worker bee with 12 years of VAX experience
including programming, system manangement and internals...

Dan "who billed 53 hours last week because it had to be done" Buckley

1. Go to management, tell them that there's going to be a 50% layoff.  Ask them
to create a list of everyone who should be cut, independently of pay/performance
factors.  Just ask them to come up with a list of people who they think really
shouldn't be with the organization anymore.

2. Fire anyone who's not on the list.

;-)

According to a reliable source the 50,000 figure came from an analyst who was
discussing DEC revenue per employee in comparison to other highitech companies.
Essentially the guy said it would take 50K in layoffs in order to boost our
revenue per employee to the top of the chart range. If we do start to manage
this company based on those Wall Street measurements then we're clearly on the
path to joining the WANGs and PRIMEs (IMHO)

    
    Revenue per employee: 
    
    Current DEC Rev/employee = 14.2B/112,000 =	126,000
    
    IBM (64.8B/345,000)				188,000
    
    HP						180,000
    
    MicroSoft	(2B/10,000)			200,000
    
    
    
    For us to get to 185,000/employee, we need 77,000 employees, or
    35,000 layoffs. 50K layoffs would get us to 229,000/employee, much
    higher than most of these companies. But the question is: can you
    retain the revenue as you layoff people. 

re: .37

>    Revenue per employee: 
>    
>    MicroSoft   (2B/10,000)                     200,000

     Microsoft have a last reported yearly revenue of about
     $2.6b.    I would expect to see them exceed a revenue per
     employee of $300k sometime this fiscal year.

    I believe the headcount at Microsoft exceeded 10,000 several months
    ago.

    You're comparing apples to oranges -- Microsoft is not a full service,
    complete product line company. Who says there has to be a magic
    equation of revenue dollars per employee anyway? Would you compare the
    revenue per employee at AVIS rent-a-car to that of General Motors?
    After all, they're both in the automobile business...
    
    Mike

    re: revenue/employee ratio

    i was wondering if in companies with a high revenue/employee ratio have
    a high burn out rate when they expect their employees to live and
    breath work.  I know that at apple it was not uncommon for people to be
    expected to work weekends and nights to a total of 70-80 hours/wk. 
    hard to have a family life or any life with that kind of a job.

    maybe a high revenue/employee ratio is not something to seek after.

    
    	Re: .40
    
    >You're comparing apples to oranges -- Microsoft is not a full service,
    >complete product line company.
    
    	Lets see, Microsoft is at $200,000/employee (plus/minus the
    suggested number modifications) and is wildly profitable.  Digital is
    at $126,000/employee and is losing money.  Perhaps the lesson here is
    that the computer companies who will thrive are those not trying to be
    all things to all people.
    
    							-craig

(This note was entered by Charlie Henderson @STO who is using a temprary account)


It is very risky to jump to conclusions just based on one statistic. Revenue
per employee is useful but with everthing else it must be taken in context.

The biggest missing factor is how is the revenue spent or what is the structure
of the expenses of the company. It is not valid to compare Digital at 100%
revenue from the conputer industry to HP with only 26% from computers (not
counting printers). Nor is it entirely accurate to compare us directly to
SUN who do very little engineering and manufacturing themselves. They outsource
much of their headcount. Microsoft is a software suplier who sell primarlily
through retail channels. What is Digitals Revenue per Software Employee.

Where is the money spent, Selling and Genral Admin (indludes marketing)? R&D?
Raw materials? Product conversion? 

One must also understand the nature of the business, is it capital intensive 
(semiconductor manfacturing, electric utilities)? labor intensive (consulting,
aerospace manufacturing)?

How elastic is our revenue to changes in empoyee population? If we remove N
employees will the revenue stay the same? Decline by N x $122,000? Increase
by some factor due to unecessary overhead? One might surmise that revenue would 
not be affected if N is small and that revenue might actually increase for 
moderate sizes of N if the cuts are taken in the right places. Revenue 
would most certainly drop by much more than $122K/employee if the cuts get into
our ability to meet our commitments and produce products.

    In reality it is NOT the revenue per head that counts, its the bottom
    line rate of profit that counts - (revenue-costs)/costs
                                              
    And it would be valid to compare AVIS with DIGITAL using that metric.
    After all FUNDAMNETALLY the market place is not about meeting needs, 
    it's about making INVESTORS the highest rate of Profit. 
    
    Winton

    
    	Whether or not revenue per head count is a valid metric..
    
    	why not concentrate on increasing revenue instead of reducing
    	headcount so much? This is where the vision of the company is
    	lacking, in my opinion. Will we miss the next boat in the age
    	of information, as we did with the PCs? Or will we be able to
    	listen to the marketplace and do a better job of predicting
    	just where the industry will be in five or ten years?
    
    	John

    Another difficulty is that the businesses these companies are in are
    radically different. Microsoft's business is software development.
    Historically they haven't had much of a sales force, haven't had a
    large support organization and don't have the overhead of carrying
    manufacturing plants, inventories, etc.

.45>    	why not concentrate on increasing revenue instead of reducing
.45>    	headcount so much? 
    
    Ask yourself:
    
    Which is easier for management, to reduce headcount or to increase 
    revenue?  
    
    Are the results more certain or more risky for one or the other?
    
    Is there any greater implication or reflection on management
    performance for one than the other?
    
    Any more questions???????????????????????????

.45>    	why not concentrate on increasing revenue instead of reducing
.45>    	headcount so much? 
    
    Ask yourself if you are President candidate in this election yr:

    Do you want to raise taxes (aka, revenue for government) or read
    your lips "NO NEW TAXES" and cutting all kind of social program,
    Medicare, housing help, student loans (aka, cutting expenses) etc ?

    In my thinking, DEC is no differnt from Federal government, or any
    state government (CA, NY) now facing budget deficit ? It's just
    standing at different magnitude level.


     My .02
     Michael..

    
    re .47 & .48
    
    The question is not what is politcally expedient, or what we can do
    to make our immediate bottom line look good. The question is what we
    should be doing to ensure our continued success and growth as a
    business. 
    
    If you are in the forest and in danger of starving, you don't cut off
    a hand, then a foot, etc., and eat them...you look for new sources of
    food to survive. Else you die. We can either be an 80K employee/$14B
    company, or we can be a 100k employee/$20B company. Someone earlier
    said that revenues shrink to accomodate the workforce size..very true.
    
    John

    
    	I recently saw the president of Stride-Rite shoes on TV blasting
    the auto industry for the way they are doing downsizing.  He made some
    good points:
    		It doesn't solve the problem (the 'leak')
    		It doesn't help reach the goal 
    		It distracts from it (if you have one))
                Takes up too much time while nothing gets done
    
    	I'd say he just gave us a state of the company address.
    

    If Digital's management managed Digital's business, it would manage
                                              ^^^^^^^^^
    profit, revenue, (market) position and image.  Since Digital's
    management has never managed the business, it now controls (or attempts to)
    what it thinks it understands, namely the highly visible cost of
    employees, in order to address problems of no profit, poor revenue,
    ever-decreasing market position and slipping image.  Its lack of 
    understanding of the business value of employees has been made evident 
    to most of employees during the past TSFOs.  The most crippling costs 
    of ineffective company information flow and inter-company cooperation 
    are not addressed even in these critical times because the ability to
    understand and address this issue is beyond Digital management's skills.  
    
    Will the Digital Corporation ever be managed ?
    
    David
    
    

    
    
    re  .37
    
    	IF, if japanese companies were the criteria, we'd need only
    	about 35000 to 40000 people to make 14 B$ of sales ...
    	There are firms that make even much more than 400.000 $ of sales
    	per employee.
                                            
    							helmut

    RE: .51
    
    
    >Will the Digital Corporation ever be managed ?
    
    I knew we were getting out of the hardware business, but when did we
    drop "Equipment"?   ;-)
    

    RE: 
    Various about the validity of using revenue per employee...
    
    If we can't be compared to HP, IBM, Sun or Microsoft who can we be
    compared to?  Are we so unique that a comparison is not possible?
    
    Look at the facts...
    
    Our revenues/employee are about 67% of the nearest one of those!!!!
    
    If it were within 10% or somewhere in the middle I might buy the
    argument that we are 10% different.  I have a VERY difficult time
    digesting that we are 33% different than everyone else in the world
    that makes computers etc.
    
    You can argue within a 10% range, but not within a 33% range.
    
    The reasons given for our low performance seem like excuses to me and
    after the fact justifications.  To the outside observer the evidence is
    so compelling as to be riduculous.  An outside observer wouldn't even
    engage in this debate.
    
    Ken Slattery

    Why is    
     revenue / employee
    the unit ?     
                  
    I agree its a pretty good guage of how efficent each is, given that
    they use the same technology - but not neccessarily.
    
    (stupid example to illustrate)...
                 
    2 companies make  14 billion each. One employs 100,000, the other
    50,000.      
                                                                
    One makes $140,000 per employee, the other 280,000.         
                                                                
    Which shares do you buy ?                                   
                                                                 
    Further information. employee cost (salary+plant) by 1) is 40,000
    2) is 200,000.                                                    
    

RE:                    <<< Note 1997.55 by METMV2::SLATTERY >>>

�    Our revenues/employee are about 67% of the nearest one of those!!!!
    
    I don't think too many people are arguing about that, but there are two
    sides to that ratio. The complaints seem (to me) to be from people who
    don't understand why it must always be the 'employee' side of the
    ratio that needs realigning, whilst the 'revenues' side seems to be
    considered ok.
    
    Much the same question IMO, as why it is the police put more effort in
    catching 'naughty' motorists than real criminals.
    
    Laurie.

    While revenue/employee is the metric, only someone ignorant of
    business would assume that changes to numerator or denominator will
    affect the ratio simply.
    
    The revenue/employee is 0 for some positions.  These are overhead and
    every such position that is eliminated improves the functioning of the
    company.  The person occupying that position should be moved to a
    position that generates something greater than 0.
    
    The real problem is that we pushed the ideas of economies of scale and
    specialization in work beyond their applicability.  We allowed people
    who add no value to be "in the loop" on too many decisions.  
    
    Today's methodology is lousy because nobody has really analyzed the
    work to be done.  We continue to throw people at problems, rather than
    thinking them through.  If we really knew how to organize work, we'd
    easily identify the people who can be put to productive work.
    
    fwiw,
    
    Dick

Perhaps we ought to be measuring revenue per manager? ;-)

    It appears to me that in all these downsizing exercises, management
    makes lists of who will be tfso'd.  When it's all done, worker bees
    are eliminated and the managers who did the lists are all still here.
    It might be a better idea to ask the little people to make the lists
    of who goes and who stays.  I bet we could eliminate alot of folks
    this way and chances are it would not adversly affect productivity.
    Any comments?
    

Sounds sort of like a revolt or revolution. Hmmm......


					- Bluejay Adametz

RE: validity

IBM does lots of things other than computers and software. Microsoft doesn't
do software. When comparing DEC to these companies some contend you can't get
an accurate base of comparison because you can't always tell which overhead 
goes where. How much smaller would IBM HQ be without some of their other 
divisions? How much larger would Microsoft's be if they did hardware?

I don't think anyone will argue that our Rev/Employee is low. The real question
is what should the target be and are cuts the only way to achieve it. I believe
the board and some management aren't convinced of either. That may be part of 
the reason for some of our recent acquisitions (Especially 2 software companies
with low headcount and good revenue).

    
    RE: .60
    
    Which is precisely how this company is turning into a management
    company that will meet and report itself into a [self-dug] grave.
    
    Those that are so desperately protecting their empires will soon
    not have any people inhabiting their empires!  It *would* be fun
    to watch all the managers scurrying around trying to manage each
    other, though . . .
    
    Cynical?  Fed up?  Depleted?  You bet.
    
    Carla
    

    RE .62 and "Microsoft doesn't do software." ...

    I've felt this way many times when considering MS-DOS, but I think you
    probably mean "Microsoft doesn't do hardware." The latter isn't 100%
    true (consider a certain rodent) but is true enough in general.

    re: 60  Amen!!
    
    When the sales organization was first hit last year, many capable
    and "proven" sales reps were canned while account execs and like
    remained.  Now I'm supporting folks who call and usually preface
    the conversation with "bear with me, I've been an account exec or
    sales manager for the last X years...so I'm a little out of touch
    with how we're licensing ABC, etc".
    
    Don't get me wrong; I'm talking to some very nice people, but let's
    get a grip....do we REALLY have time for these folks to once again
    get the "hang" of actually selling?
    
    If this is happening in the sales organization, it's happening in
    every organization.  Let's face it, for too many years the only 
    method for most people to keep pace with the economy has been to
    move up the ladder out of the IC category.  We still do not reward
    ICs adequately.
    
    It's been painful to watch old friends go, but some difficult
    decisions have to be made.  IF all the little Indians have to go;
    can the remaining Chiefs really get the job done?
    
    Guess Agatha Christie was right......
    

    
    RE: .60
    
    	Wouldn't it be interesting if we started an Employee Stock
    Ownership Plan - especially now with the stock so low?  How much would
    we have to borrow to 'buy' the company?
                                                          

    re .60
    
    When our management team (manager, senior manager, group manager, group
    manager squared, personel consulstant) presented their best
    understanding of the TFSO info to us a coupla weeks ago, they were
    asked the very question. Answer (my interpretation), managers will be
    appraised exactly as individual contributors and are subject to the
    same cutting rationale.
    I keep hearing over and over and over again by members of another
    organization who have been told by their managers and by their managers
    and ... that they are very, very heavy in managers and managers need
    particularly to expect to be cut.
    
    			ymmv
    			herb

The title of .52 contained an inappropriate word and as such, I modified the
title and notified the author.  .54 was a reply to .52 that contained the
inappropriate word and has been deleted as it is no longer relevant.

Bob - co-moderator DIGITAL

re .58:

>    The revenue/employee is 0 for some positions.  These are overhead and
>    every such position that is eliminated improves the functioning of the
>    company.  The person occupying that position should be moved to a
>    position that generates something greater than 0.

Are you suggesting that the people who clean the toilets should be
selling our products?

    
�	Are you suggesting that the people who clean the toilets should be
�	selling our products?
    
    or maybe,
    
    ...the people selling our products should...nah, too easy a target.
    								
                                                               {:)
    

    From: [email protected] (Tse-Sung Wu)
    Newsgroups: alt.politics.bush,alt.politics.clinton,comp.sys.dec
    Subject: DEC deal with Bush
    Date: 22 Jul 92 12:41:14 GMT
    Organization: Doctoral student, Engineering and Public Policy, Carnegie
    Mellon, Pittsburgh, PA
    
    NOTE CROSS-POSTINGS--
    
    I am not interested in a flame or even mildly heated debate about the
    candidates.  I just have a rumor that I'd like to know if anyone could
    confirm or deny.  I haven't seen anything posted on the net.  If I
    missed something, please forgive the rehashing.
    
    The daughter of a classmate of mine works at DEC somewhere and said that
    it is common knowledge among DEC employees (the story is purportedly
    floating about on DEC's email net) that a huge (30,000? employee) layoff
    has been _postponed_ until after the election at the request of
    President Bush.  And that the latter offered DEC hefty contracts in
    return for the postponement.
    
    Is this just a rumor, 'cause I haven't seen anything about this in the
    papers.  Not interested in flames, just want to know if this is just a
    rumor.
    
    Tse-Sung
    

    re: -1 
    
    	I take it you don't read the trade rags much?  30K layoffs
    are being bandied about in the press, by stock analysts etc...

    The Bush/DEC contract rumor first appeared in the Boston Globe.
    
    Prior to that appearance it was not in any of the VAX Notes Conferences
    which would likely discuss it, or in any of the mailing lists I'm on.
    
    Of course, after its appearance was discussed extensively _after_
    publication.
    
    After some research, I conclude that if it did come from an employee it
    was a hoax, more likely, it's a politically inspired hoax and could
    have originated anywhere.

    
    
    Don't know if there is a more appropriate note for this or not, as
    I don't have the time to search through the directory.
    
    Why doesn't management consider swapping those employees who are
    volunteering for this TFSO with those who have been named and can't
    really financially/personally handle it?  There are many employees
    out there who do not have families to support that are in better
    positions to take the package.  It wouldn't be that difficult a
    job to do a skills match up.
    
    Has this been suggested before?  Any comments?
    
    Thanks,
    Carole

    Re .74 (Carole):
    
    >Why doesn't management consider swapping those employees who are
    >volunteering for this TFSO with those who have been named and can't
    >really financially/personally handle it? ...
    
    The TFSO has been defined as "an involuntary methodology," meaning,
    technically, that nobody can volunteer for it (are you confusing this
    with the recently completed SERP program?).
    
    Steve Kallis,  Jr. 

    
    Hiya Steve,
    
    What I meant by 'volunteering' is that there are people who are willing
    to and are in a beter position to take the package, whereas some of
    those being named are not.
    
    I realize that this is an 'involuntary' package.  I was attempting to
    put out an idea for a different approach.
    
    And no, I'm not confusing this with the recent SERP package. 
    
    
    Take care,
    Carole

    I am going to attempt to draw out facts about layoffs and get rid of
    the fiction about them.  In the course of doing this many will accuse
    me of being cold or something like that.  I accept your criticism but
    please look at the evidence that I will present and evaluate it for
    what it is.
    
    In this note and other people have called the coming layoffs...
    
    1)  Hosing people
    2)  Destroying people
    3)  Eliminating hope
    4)  Killing the "ideal" of Digital
    
    The facts are:
    
    Digital will be notifying thousands of people that their services are
    no longer needed.  In addition to this, Digital will give these people
    a substantial amount of money because Digital feels a moral obligation
    to them.
    
    Digital is not:
    
    1)  Lining people up in front of a firing squad
    2)  Taking away people's homes
    3)  Taking away their families
    
    I personally know about 15 people that have been layed off.
    
    1)  None of them has committed suicide
    2)  None have lost their house or families
    3)  A few have chosen not to continue working
    4)  A few have taken the cash and started businesses that they always
    	wanted to start
    5)  The rest found jobs within a few months.  Some of these are happier
    	now some are not.
    
    This is not devestation.
    
    Let's look at SERP...
    
    1) If I remember over 50% of the people VOLUNTARILY accepted the offer
    2) These people (in general) have been with Digital the longest and
    	are most "invested" in the "Digital way"
    3)  These people are on the tail end of their careers and will
    	presumably have a more difficult time finding new jobs.
    4)  Something drove these people to make the decision they made.
    5)  None of them were shot, lost their homes, etc.
    
    Let's give people more credit...
    
    There is no doubt that those who will be layed off will suffer from the
    experience short term.  If people believe that they will lock
    themselves in a corner of their house and whither away they are wrong. 
    At some point they will get over the pain, re-invigorate themselves and
    start over.  This is what human spirit is all about.
    
    If you can't imagine life after being layed off I would suggest that
    you play some "scenario" games.  Nothing is guaranteed.
    
    The emotion of layoffs often gets in the way of the reality.
    
    Ken Slattery

Carole,

Let's assume that  a  Manager  has  10  direct  reports.   Manager ranks the
people based on performance  and value to the group and finds that they are
all ranked fairly linearly from  1  to 10;  #1 being a top performer and #10
beign a "low 3" performer.  Manager  has  been  told  to reduce headcount by
10%. 

#1, bright person that she is, comes to  Manager  and says "Look, Manager, I
know you need to fire (mince not words) someone and I believe it will not be
me.  My spouse has a good job, we  have  no debts and I am positive I
can get a new job within a couple of weeks. Now then,  I think I know who you
will name and that person is a single parent, 2 kids in  college, in debt up
to the ears, etc.  I propose that you fire me and keep that person."

Manager now faces a dilemma.  Since the group's work will not decrease,  the
remaining  people must pick up the slack.  Clearly, #1, if she stays around,
will pick  up  more  than  her share of #10's work if #10 is fired.  Just as
clearly, #10 will  not  be  able to pick up ANY of #1's work if #1 is fired.
If #1 is fired  in  place  of  #10,  there is a probablilty that the group's
performance will suffer.  That  will  likely  cause  Manager  to  take  some
considerable  heat  from  Upper  Manager due  to  a  poor  choice;    likely
translates to a hit on Manager's next  review.   Compounding all that, since
the group's efficiency will actually decrease by firing  #1  instead of #10,
that  action  increases  the likelyhood that Manager will face  the  dilemma
again next quarter, only Manager will be in a worse  position  because #1 is
no longer around.

Although it may seem as if I "stacked the deck" in describing the characters
and  the  situation,  it  is a very real dilemma faced by many  Managers  in
situations  we now face.  If readers still think Managers do not earn  their
pay, read  the  above  again and start substituting names of your co-workers
for #1 and  #10 and YOUR name for Manager.  It does cause some of us to have
sleep problems.

FWIW
Dave

    Re .77 (Ken):
    
    >In this note and other people have called the coming layoffs...
    >
    >1)  Hosing people
    >2)  Destroying people
    >3)  Eliminating hope
    >4)  Killing the "ideal" of Digital
    
    I don't agree with any of the above assessments.  "Eliminating hope,"
    for one, has validity to this extent: if a person _hopes_ he or she
    won't be laid off and they are, then the layoff notice does destroy
    _that_ hope, at least.
    
    Doubtless, some of the layoffs will be for political rather than purely
    business reasons.  I state that only because in a company of 113,000,
    there have to be at least a few such cases when we're talking a 15% -
    20% probable layoff.
    
    Life isn't always fair; the world isn't user-friendly.  But --
    
    >Digital is not:
    >
    >1)  Lining people up in front of a firing squad
    >2)  Taking away people's homes
    >3)  Taking away their families
     
    In fact, the financial package softens the blow; however,
    
    >3)  A few have chosen not to continue working
    
    For many people, it's not a choice.  It's dependent on skills, job
    availability, and the like.
    
    A layoff is never pleasant, and cannot help but inflict some pain. 
    Nobody (including those who have to administer it) likes a layoff.
    
    >Let's look at SERP...
    >
    >1) If I remember over 50% of the people VOLUNTARILY accepted the offer
    
    ... which was a larger number than had been anticipated.
    
    >2) These people (in general) have been with Digital the longest and
    >	are most "invested" in the "Digital way"
    >3)  These people are on the tail end of their careers and will
    >	presumably have a more difficult time finding new jobs.
    >4)  Something drove these people to make the decision they made.
    
    A carrot-and-stick.  The carrot: a better benefits package than they
    otherwise would have gotten.  The stick: fear of imminent layoff
    (rumors were floating even then) with much reduced benefits, in many
    cases.
    
    >The emotion of layoffs often gets in the way of the reality.
    
    Too true!
    
    Re .78 (Dave):
    
>Let's assume that  a  Manager  has  10  direct  reports.   Manager ranks the
>people based on performance  and value to the group and finds that they are
>all ranked fairly linearly from  1  to 10;  #1 being a top performer and #10
>beign a "low 3" performer.  Manager  has  been  told  to reduce headcount by
>10%. 
>...
>Manager now faces a dilemma.  Since the group's work will not decrease,  the
>remaining  people must pick up the slack.  Clearly, #1, if she stays around,
>will pick  up  more  than  her share of #10's work if #10 is fired.  Just as
>clearly, #10 will  not  be  able to pick up ANY of #1's work if #1 is fired.
>If #1 is fired  in  place  of  #10,  there is a probablilty that the group's
>performance will suffer.  That  will  likely  cause  Manager  to  take  some
>considerable  heat  from  Upper  Manager due  to  a  poor  choice;    likely
>translates to a hit on Manager's next  review.   Compounding all that, since
>the group's efficiency will actually decrease by firing  #1  instead of #10,
>that  action  increases  the likelyhood that Manager will face  the  dilemma
>again next quarter, only Manager will be in a worse  position  because #1 is
>no longer around.
    
    But, as I understand it, the way it works is along these lines:  The
    person who's most likely to be laid off is the one whose work has "gone
    away."  _If_ nobody's work goes away, then the next criterion is
    performance.  In case of a tie, the last criterion is seniority (with
    presumably the most senior having the edge).  
    
    Steve Kallis,  Jr.     

    
    

Re: .78

I find it refreshing that your scenario considers real people and real
situations. Would some just merely look at it as a 10% reduction in
'resources'?

    re .74
    
    >It wouldn't be that difficult a
    >job to do a skills match up.
    
    I wish you were right, but the number of square pegs in round holes and
    the delay in recruiting the right people for projects suggests that you
    are over-optimistic.  When you fit that in with our lack of
    administrative expertise, I'm convinced you're wrong.
    
    fwiw,
    
    Dick

    
    Thanks for the replies!
    
    There will be cases where people who are being TFSO'd have equal
    skills and ratings (don't forget it is the *last* review that is
    considered - I know excellent people who have gotten 3 ratings
    because of their managements lack of connection to what they really
    do!) as those who are willing to volunteer.
    
    If the people who were willing to volunteer put in some 'leg work'
    to find possible candidates, it could work.  
    
    ....or maybe the whole thing is a lame idea! 8^}
    
    
    Carole

    Carole<---,
    
    I agree! Isn't that what P-E-R-S-O-N-N-E-L is for?  Why are reviewed
    yearly with 10 page reviews?  Where does all this information go?
    Someone somewhere should be responsible for tabulating individual's
    skill sets.  And then to be able to cross reference them to a group's
    needs.  We are a company company, right?
    
    It all boils down to who sniffs who's butt and quotas.
    
    Reg.

    The bottom line is you have to ask yourself everyday if you 
    have marketable skills/services.  If you are a nurse, a 
    computers techie, or a security guard, you are very marketable,
    you don't have to worry about working.  Check any help wanted
    section of a newspaper if you want proof.  I wish I didn't
    have to spend 10-15 hours a week learning and keeping up with
    my field of work, but reality demands it.  Like I have said
    before, everyone must ask the question, 'What would I do if
    I got laid off tomorrow?', and then plan accordingly.
    Personally, I started asking that question the day IBM announced
    it's first major 'layoff' 3-4 years ago (if it can happen to
    them, it can happen to us).  Most of my fellow Deccies thought
    I was paranoid at the time, but then I had been through two 
    previous layoffs...
    
    Brad.

    Layoffs change the psychology of working, especially in the long term.

    You think, if I can't trust the management here to keep me employed,
    then I have to worry a bit more about my employablity.

    If the company may not want me after the next paycheck, why I should I
    develop skills that meet the needs of the company?  Shouldn't I
    concentrate on skills that serve me better, if the two needs are not
    identical?

Digital is the 3rd straight company I've worked for that has had layoffs of
one kind or another - the first one - the company closed the doors - everyone
gone.  The second one, 50% of the work force gone in a maddening, drawn out,
slow bleed (sound familiar?), and now Digital.

Because of that, I've always had back up plans to implement, knowing that 
no matter how great the company is to its employees - and believe me, DEC is
eons above the other two companies that went through this - layoffs or worse
can happen.

The absolute biggest difference is that the economy in the NOrtheast, where
I am - is the pits right now.   And with thousands of Deccies hitting the
streets (along with Prime employees, and others), it will be very tough to
find a job here.   (IMO)   And compounding that, the economy in many other
areas of the country isn't that great.    

In the two previous companies, I was able to find jobs fairly quickly in the
booming Mass/NH economy.   Even had the luxury of turning down jobs.  I'm
not as optimistic about that now (if I get tapped...).

My wife (computer field) has been looking for 2 months with nothing so far...

JD

    re .84 (Brad):
    
    You can be very prepared, but other factors might intervene.  Although
    there's not supposed to be, there _is_ age discrimination.  For
    instance, I have literally decades of experience.  This is valuable in
    terms of my ability to function; however, the fact that I had that many
    years of experience also makes me much less marketable because of the
    consequent age I've achieved.
    
    For me, things aren't quite as bad as for some: my skills work ,in a
    variety of different industries.  For others of my age (55) who are
    very narrowly spewcialized, things are worse.
    
    Steve Kallis, Jr.

>                     -< Bring back the Fuller Brush Man! >-
    
    <Insert snappy comeback line here>
    
    	Stu

    re: 87
    
    	You make an excellent point, if you specialize, and pick the
    wrong specialty (sp), your age won't matter, you'll have difficulty
    finding a job.  When I was inside, I had one specialty, VMS.  Today,
    VMS isn't even my number one skill.  As far as the age discrimination
    goes, you can be too young for a job too!  One thing I am doing now
    to combat age discrimination when I am old is by getting out of debt
    at a younger age so that if I do get aged later on, I won't be in 
    such bad shape.  Basically though I believe in supply and demand in the
    job market, if you can supply  a high demand skill, you'll get hired
    regardless of the age.  Remember Grace Hopper?
    
    Brad.

    {entered without permission - Business Week/August 3, 1992}
    
    DID DEC MOVE TOO LATE?
    The comeback costs are staggering
    by Gary McWilliams
    
      In the end, Kenneth H. Olsen simply had too soft a heart.  Despite
    his infamously gruff exterior, the 66-year-old founder of Digital
    Equipment Corp. still wanted to run the $14 billion minicomputer
    company as a giant family business, with him as the benevolent father. 
    Even as the company's payroll rose to 126,000 employees, he still made
    sure that everybody got a turkey at Thanksgiving.  After 35 years, he
    wasn't about to change.
    
      But the computer industry had changed--drastically and irrevocably. 
    With powerful desktop computers stealing minicomputer sales, the DEC of
    holiday turkeys, lifetime employment, and profit margins fat enough to
    pay for it all was a thing of the past.  The times called for a new
    DEC, a far leaner and meaner operation.  With the old DEC hemorrhaging,
    on July 16, Olsen finally was pressured to resign.
    
      In a conference call, Olsen told directors that he will step down on
    Oct. 1.  At the same time, he nominated a new CEO to carry out the
    drastic cost-cutting he couldn't stomach--and to rebuild DEC around a
    promising new microprocessor technology called Alpha.
    
    TECHNICAL PROWESS.  Olsen's handpicked successor, Robert B. Palmer, is
    a 180-degree turn from the cantankerous, unpredictable founder. 
    Palmer, 51, is regarded as a well-organized and articulate manager. 
    And in contrast to the intensely puritanical Olsen, Palmer is a
    debonair divorce' who drives a Porsche Targa.
    
      But, like Olsen, the new boss is also an entrepreneur who made it on
    his technical prowess.  Palmer worked his way through engineering
    school and, while still in his twenties, co-founded memory-chip maker
    Mostek Corp.  Palmer's background in the cutthroat semiconductor
    business has conditioned him to continuously push down costs.  A
    onetime chip designer, he has also been a driving force in developing
    DEC's Alpha chip, the key to turning the company around.
    
      Palmer's appointment was approved by the board on July 22.  He had
    already won over directors during his frequent appearances at board
    meetings.  "The presentations he's made are the most impressive," says
    Thomas L. Phillips, a director and retired chairman of Raytheon Co. 
    While Olsen dragged his feet on cost-cutting, Palmer showed the board
    what could be done.  After taking over manufacturing in late 1990,
    Palmer quickly shuttered 10 factories.  His staff cuts account for more
    than half of the 19,000 positions DEC has eliminated in the last two
    years.  Just last month, Palmer convinced directors to allocate $425
    million for a chip plant that he argued is crucial for the Alpha effort
    and DEC's rebound.
    
      THese contacts with the board helped propel Palmer past longtime DEC
    executives John F. Smith, senior vice-president for operations, and
    Software Vice-President David L. Stone, who had been seen as likely
    successors to Olsen.  Palmer "sells himself well and sells his programs
    well," says MasPar Computer President Jeffrey C. Kalb, who brought
    Palmer to DEC in 1985 to run semiconductor operations.  Neither Palmer
    nor Olsen would speak with BUSINESS WEEK.
    
      RUMORS FLY.  With Palmer's appointment, investors and customers
    breathed a collective sigh of relief.  Despite losses, Olsen had held
    out all this spring against the cost-cutting moves that top executives
    and his board demanded.  Analysts predicted more losses, and by late
    June, the stock had drifted to a nine-year low of 33.25, a dismal skid
    from an all-time high of 199.  As the company closed the books on
    fiscal 1992 ended June 30, rumors began to spread on Wall Street that
    the board had reached is limit and was ready to force the legendary
    founder out.
    
      Insiders say that Olsen and the board had clashed over everything
    from sales commissions to the company's direction.  Rumors of his
    departure boosted DEC's stock to 38.  When the news finally came, the
    stock jumped another four points, and some analysts issued new purchase
    recommendations.  "A lot of people believed Ken was the problem, not
    the solution," says Marc G. Schulman, an analyst at UBS Securities Inc.
    
      The euphoria quickly passed as the enormity of Palmer's task became
    apparent.  The question remains whether it's too late to do anything
    more than avert disaster.  By delaying DEC's day of reckoning, Olsen
    had raised the costs to staggering heights.  DEC is not only years
    behind its rivals in cutting bloated costs and driving into new markets
    but it is also no longer even profitable.  Minicomputer sales have been
    stagnent for years, and VAX revenues are now plunging as customers wait
    to buy replacement machines based on the new Alpha chip due out late
    this year.  The result: DEC is expected to show a $300 million
    operating loss for the quarter ended June 30, its third quarterly loss
    in a row.  Schulman forecasts operating losses in the next two quarters
    totaling as much as $208 million.
    
      So, Palmer's first order of business will be to preside over a
    jarring layoff.  Instead of paring workers gradually and giving them
    months to search for new jobs, as Olsen had done, Palmer is expected to
    move decisively.  Some 15,000 employees, including 8,000 in the
    U.S., will be fired and given a week to clear out.  The numbers are so
    big that the company plans to stagger the layoffs over the next few
    weeks to avoid over-loading unemployment offices in New England. 
    Severance pay and other downsizing costs are expected to push the
    fourth-quarter net loss as high as $2 billion.
    
      With DEC running an operating loss, these charges are tearing through
    the company's cash.  By June, 1993, estimates PaineWebber Inc. computer
    analyst Stephen K. Smith, the company will have burned up $1 billion of
    its current $1.5 billion in cash.  As a result, DEC will have to borrow
    just to fund operations over the next few quarters.
    
    PAINFULLY LATE.  To turn DEC around over the long term, Palmer has to
    make Alpha a hit.  The technology, a so-called RISC (reduced
    instruction-set computing) microprocessor, will replace the VAX
    minicomputers, based on technology first designed in the mid-1970's. 
    In recent years, DEC's share of the mini market has fallen to 14%,
    while IBM's hot-selling AS/400 series has given Big Blue a 27% share. 
    DEC is also counting on Alpha to help grab a share of the fast-growing
    workstation market, where it trails Sun Microsystems Inc. and
    Hewlett-Packard Co.
    
      On paper, at least, Alpha is the fastest RISC microprocessor yet. 
    "Alpha is clearly a leapfrog technology," says Wes Melling, program
    director od midrange computing research at consulants Gartner Group
    Inc.  And he says DEC's huge library of VAX software should make
    Alpha-based machines appealing in the broad office-computing market, in
    contrast to other RISC machines, which have been used primarily by
    engineers.  Another potential boost for Alpha will be Microsoft Corp.'s
    Windows NT, a new operating system that the software giant is now
    adapting for the Alpha chip.  That should allow Alpha machines to run
    all sorts of popular PC software.  That's in addition to the VAX
    software and OSF/1, a version of Unix.
    
      Still, DEC's entry is painfully late into a market where IBM,
    Hewlett-Packard, and sun have been shipping product for several years. 
    And these companiew have also signed up other computer makers to use
    their RISC chips.  On IBM's team, for instance, are Apple Computer,
    Motorola, and Groupe Bull of France.  DEC, by contrast has only one
    sizable Alpha partner so far, Italy's Olivetti.  Japan's Kubota Corp.
    and supercomputer maker Cray Research Inc. plan to use the Alpha chip,
    but not in great numbers.
    
      To leapfrog his competition, Palmer will have to shore up DEC's badly
    demoralized organization.  Olsen's increasingly idiosyncratic
    management style over the past few years has driven dozens of
    exasperated executives and managers from the company.  The most recent
    defection was Pier Carlo Falotti, president of DEC Europe, who has been
    named President of ASK Computer Systems Inc., a California software
    maker.  Falloti "was very unhappy," says Bruno D'Avanzo, a former DEC
    Europe executive and now a managing director at Olivetti.  "Olsen's
    erratic habits really got to him."
    
    MARKETING FAILURE.  A series of reorganizations and strategy shifts
    have also left customers confused.  In the 1980s, DEC surged in the
    market with a clear-cut message: Its VAXes, ranging from desktop to
    mainframe-caliber machines, all ran the same software and could
    therefore be easily networked anywhere in the world.  That message was
    lost as DEC cast about for new growth strategies in recent years. 
    Peter Daboul, vice-president for information systems at Massachusetts
    Mutual Life Insurance Co., says now he is in "a wait and see mode"
    regarding DEC.  Although it uses four large VAXes at the home office
    and smaller ones in its branches, Mass Mutual has no plans to buy more
    DEC gear.  "The key is how their new captain carries out this course
    correction," Daboul says.
    
      Indeed, Palmer's success is anything but certain.  His background in
    microchips and operations give him a good foundation.  But DEC also
    badly nees marketing skills--an area where Palmer has yet to make his
    mark.  "He doesn't have that much background in computers or, for that
    matter, in marketing or sales," says MasPar's Kalb.  He believes that
    DEC somehow lost the ability to communicate the value of its VAX
    software.  That, in turn, has made it increasingly difficult to sell
    its relatively high-priced hardware.  "It was a failure of marketing,"
    Kalb explains.
    
      If Palmer's rapid rise, as insiders say, stemmed from his ability to
    sell himself to top management, DEC's resurgence may well depend upon
    his ability to sell DEC to customers who have grown skeptical.  In
    Olsen's old DEC, the hard sell was frowned upon.  The puritanical
    founder thought such tactics were unseemly.  For the new DEC, they may
    mean survival.
    
    end
    
    
    

Getting back to the revenue/employee metric:
I have no problem with using revenue/employee as a valid basis for comparing
the health and efficiency of similar corporations.

First you have to deal with "similar corporations".
HP - no problem
IBM - close enough..
Microsoft - Getting on shakey ground in that the product/revenue mix is pretty
		different from our own
A&P Grocers - Now hold on there!!  Just making the point that there is a line
	to be drawn somewhere unless you want to claim that revenue/employee 
	is a universal scale across all industries.

Now, my main problem with the discussions of the "experts": the next statement
is almmost invairably "so if Digital would just cut X0,000 employees, their
revenue/employee would be in line, so that must be what they're going to do."
This seems very naive to me in that it assumes that you can cut any arbitrary
number of employees without affecting the revenue number.  This is patently
ridiculous!  If the "last guy" TFSO's himself, what will the revenue/employee
be?  0/0.

It seems that the real answer is what Palmer laid out: carefully analyze
the entire pipe from customer request back to engineering to manufacturing and
back to the customer, to billing, and finally banking the money.
Having analyzed it, redesign the pipe and make it more efficient.  This may
involve laying more people off.  At least it would be rational cuts which might
help in the long run.  I've seen field SWS folks who have been CONTINUOUSLY
BILLABLE for YEARS laid off.  At $100+/hr billing rate, you don't think that
affects the revenue stream???

    One more time: the 50,000 number is the number that you get when you
    take the profitability goals which Digital (not Wall Street) set, given
    the current revenue and productivity of Digital.

    A Wall Street analyst just plugged in the numbers using current revenue
    and productivity and observed that Digital on its current track needs
    to layoff 50,000.

    The job of management is to put Digital back on track so that it is
    competitive and profitable (period).

    If that takes 10,000, 20,000, 30,000, 40,000, 50,000 layoffs that the
    way it's got to be.  No customer, no investor is going to look upon
    Digital as a charity.  Everyone is acting in their own self-interest.

    As for "field SWS folks", we've been called "Digital Services Software
    Specialists and Consultants" for about two years.  There have been
    profoundly dumb layoffs in New York but thank goodness we're able to
    hold onto most of the good technical people.

    Someone else said that since the first taste of layoff blood, Digital
    has begun to look at that as a way to reduce expenses without a regard
    to increasing productivity or revenue.  I guess we'll never find out
    what was Ken Olsen's plan to restore Digital to profitability.  I hope
    we learn what Bob Palmer's plan is.

.92>    One more time: the 50,000 number is the number that you get when you
.92>    take the profitability goals which Digital (not Wall Street) set, given
.92>    the current revenue and productivity of Digital.
.92>
.92>    A Wall Street analyst just plugged in the numbers using current revenue
.92>    and productivity and observed that Digital on its current track needs
.92>    to layoff 50,000.
    
    Seems pretty clear to me that this shows the futility of relying on
    layoffs to reach the desired target.  Wonder if that's what the analyst
    was trying to show?  It makes an interesting reality check for outside
    evaluation of management...
    
    Laying off 50,000 employees would constitute around 45% of the
    population, seems inescapable that such a large cut would impact
    revenue somewhat.
    
    On the other hand, that figure seems right in line with KO's oft-quoted
    answer to the question "how many people work at Digital?" - perhaps
    "About half" can be refined based on the layoff bodycount?