Conference 7.286::digital

  MAYNARD, Mass.--(BUSINESS WIRE)--July 14, 1994 -- Robert B. Palmer,
President and Chief Executive Officer of Digital Equipment Corporation,
today announced that Digital is eliminating its traditional matrix
management approach that relied on complex relationships across business
organizations, functions, and geographic regions.
  The company is replacing it with a simplified structure that will
increase management accountability, sharpen customer focus, and return the
company to sustained profitability.
  "These steps, along with other actions we've taken over the past 20
months, are part of our strategy to make Digital the company to turn to
for products and services needed to build networked, open client/server
environments that support simplified business processes, and enable
enhanced individual and organizational productivity,"  Palmer said.
  Palmer said Digital will rapidly implement company-wide the key business
strategies that have been tested and refined over the last 20 months in
its most successful business units.  As a result, the company will place
engineering, manufacturing, marketing, and sales responsibilities under
each business unit manager.
  The structure will increase focus and accountability; facilitate the
design of products for volume markets; and build upon excellence in
service to maintain customer satisfaction and loyalty.
  The company is establishing the Computer Systems Division under Vice
President Enrico Pesatori, the Components Division under Vice President
Charles F.  Christ, and the Advanced Technology Group under Vice President
and Chief Technical Officer William D.  Strecker.  The two Divisions will
each include three business units.  Pesatori, Christ and Strecker all
report to Palmer.
  In addition, there are three other business units that report directly to
Palmer.  They are: Multivendor Customer Services under Vice President John
J.  Rando, Digital Consulting under Vice President Gresham T.  Brebach,
Jr., and Semiconductor Operations under Vice President Ed Caldwell.
  The company confirmed previous reports that it is eliminating
approximately 20,000 positions.  However, the process will be completed
within 12 months, as opposed to the 24 months stated in previous reports. 
Based on the organizational changes and competitive benchmarking, the
company's workforce will total about 65,000 at the end of the period.  In
addition, the company will reduce its utilized space worldwide by
approximately 10 million square feet to 22 million square feet within 24
months.
  As a result, the company expects to take a restructuring charge of $1.2
billion in its fiscal fourth quarter that ended July 2. Approximately 60
percent of the restructuring charge will be related to workforce
reductions, with the remainder in facilities.  Digital anticipates
reporting its fourth quarter, and the full 1994 fiscal year results, the
week of July 25.
  The company also expects to absorb in the quarter a $350 million to $400
million non-cash expense associated with intangible asset and other
write-offs.
  Palmer said the expense reduction actions announced today will result in
annualized cost eliminations of approximately $1.8 billion. Coupled with
other restructuring actions taken over the past 20 months, cost
eliminations are expected to reach more than $3 billion on an annualized
basis.
  The company, Palmer said, will continue to call on its largest customers
and maintain the technical resources to support them, while at the same
time, implementing an aggressive program to develop and enhance its
relationships with selling partners.
  Digital, Palmer said, will continue to offer world-class products based
on the most important open client/server hardware platforms for the '90s
-- Intel and Alpha AXP -- including expansion of the nearly 6,000
applications already available on the Alpha AXP platform. While offering
customers increasingly attractive ways to migrate to Alpha AXP systems,
the company also will continue to update and support its VAX system
offerings.  He also said Digital will support three operating systems:
OpenVMS, OSF/1 UNIX, and Microsoft Windows NT.
  The Computer Systems Division includes the Personal Computer Business
Unit, Systems Business Unit, and Accounts Business Unit. The division is
responsible for engineering, manufacturing, marketing and sales of
networked open client/server computing built around Digital's leadership
Alpha AXP and Intel-based platforms.
  The Components Division includes the Components & Peripherals Business
Unit, Network Products Business Unit, and Storage Business Unit.  The
division is responsible for engineering, manufacturing, marketing, and
sales of leading-edge technology in these areas of established Digital
strength and recent marketplace success.
  The new Advanced Technology Group will identify future market
opportunities, and rapidly transform innovation into profitable new
products, services, and businesses.  Product focus will include mobile and
wireless communications, multimedia computing, and continued support of
Digital's industry-leading Internet activities. The other three business
units all serve the marketplace in specific areas of proven Digital
leadership.  Like the Computer Systems and Components Divisions, these
three business units retain profit and loss as well as balance sheet
responsibilities to achieve their goals.
  Digital Equipment Corporation is the world's leader in open client/
server solutions from personal computing to integrated worldwide
information systems.  Digital's scalable Alpha AXP platforms, storage,
networking, software and services, together with industry-focused
solutions from business partners, help organizations compete and win in
today's global marketplace.
 Note to Editors:  Digital, the Digital logo, Alpha AXP, VAX and
                   OpenVMS are trademarks of Digital Equipment
                   Corporation.

  UNIX is a registered trademark in the United
  States and other countries, licensed exclusively
  through X/Open Company, Ltd.

  Windows NT is a registered trademark of Microsoft
  Corporation.

  OSF/1 is a registered trademark of Open Software
  Foundation, Inc.

           CONTACT: Digital Equipment Corp.
             Joseph Codispoti, (508) 493-6767
             Bradley Allen, (508) 493-7182

    There is no mention if the reduction of 20,000 employees will come, at
    least in part, from unit sales (parts of Storage and Consulting). Also,
    no mention of any asset sales or equity stakes to cover the huge
    restructuring charge.
    
    Are details not finalized yet, or awaiting the meeting with analysts, or
    that buyers backed off ?

No mention of software, either.

I guess people across the country are getting a chance to know who Digital is
now, although it's not in the best light.  Today's announcement was the lead
story on the national CBS radio news this morning.

Paul

re: .5

The material in .5 was distributed as DIGITAL CONFIDENTAL and non-forwardable
to recipients of corporate press releases.  Is it proper to have it posted here
now? 

>>  MAYNARD, Mass.--(BUSINESS WIRE)--July 14, 1994 -- Robert B. Palmer,
>>President and Chief Executive Officer of Digital Equipment Corporation,
>>today announced that Digital is eliminating its traditional matrix
>>management approach that relied on complex relationships across business
>>organizations, functions, and geographic regions.
>>  The company is replacing it with a simplified structure that will
>>increase management accountability, sharpen customer focus, and return the
>>company to sustained profitability.
  

Maybe I'm a cynic, but the "new" organization does not appear to be 
substantively different from the current model.  Are we throwing still
another coat of paint on a rotting wall?

re Note 3245.7 by POCUS::OHARA:

> Maybe I'm a cynic, but the "new" organization does not appear to be 
> substantively different from the current model.  Are we throwing still
> another coat of paint on a rotting wall?
  
        The problem never was mainly a bad organization -- it was an
        upper (and possibly some of middle) management that couldn't
        adapt their thinking and working to new realities.  There
        were a few exceptions:   Pesatori and Christ are notable
        among them.  They were already succeeding in the *old*
        organization -- I assume that they will continue to succeed
        in the new.

        There are some elements of the new organization that were not
        succeeding in the old -- I assume that they will continue to
        do so.

        Bob

re: .6

Steve, please explain.  It sounds like you are saying that anyone who selects
to receive corporate press releases in their Reader's Choice profile received
this, yet it is supposedly not forwardable.  The last time I checked, anyone
could add press releases to their Reader's Choice profile, and thus receive
the same message.

Bob

  
>>        The problem never was mainly a bad organization -- it was an
>>        upper (and possibly some of middle) management that couldn't
>>        adapt their thinking and working to new realities. 

OK, if so, why go through the exercise of announcing still another 
organizational change if merely replacing some key people would fix the
problem?  And will we see the reduction of middle management in this "new 
world order du jour"?  

The more things change around here, the more they tend to look the same. 
Only fewer faces in the trenches.

RE .6 - the trailer at the end of .5 says this was distributed
via Reader's Choice, which implies to me that it is available
to all employees, and would therefore be eligible for posting
here (right???). That does not mean it is suitable for outside
distribution.

Also, it does address some very good questions that are 
probably at the front of people's minds, so I would *hope* that
it is open to all of us. Whether you like the anwers or not, 
it shows the corporate position on them.

    RE .5 - I see no mention of IM&T as part of any of the business units
    or as a corporate function.  I thought McNulty was on Palmer's staff as
    the CIO and also reported to Brebach.  Anyone have an educated guess as
    to where IM&T fits?  Have been hearing rumors that we'd be sold along
    with Digital Consulting and Digital would outsource its IM&T work to
    the buyer.
                                          

RE: .12

Sort of like musical chairs, if the music stops and there are no chairs lef tfor
you to park it in, then...

         This press release presumably went out to the press before,or 
         at the same time, as it was mailed via Reader's Choice.  If 
         that is the case it is now common knowledge throughout the 
         world...except in this notesfile where we are being told we 
         can't see it!
         
         And you guys complain about communication...bah.
         
         Ian ;-)

My only comment was that the document was tagged by the mail
system by the senders (readers choice) as NON-FORWARDABLE as well
as DIGITAL CONFIDENTIAL.  Of course, anyone getting PR via that
channel has gotten this document.  I was just asking if it was
proper fodder for this conference in terms of corp guidelines; not
in terms of whether employees should be aware of it.  I feel more,
not less, communication is needed within the corp.  However, there
is also afoot a concerted effort to clamp down on improper dissem.
of info.  I didn't want someone to get burned.  Of course, per the
info, about 20k will ...

re: .5
>    o    We have established five world-wide profit centers, including
>         two new divisions, with full responsibility and accountability
>         for profitability and for market success.

    So does this mean that the cbu's in CS div and C div don't  have P&L other
    than that deigned by EP and CC?

    The Accounts cbu is new isn't it?  Looks like most of the direct sales
    force will belong to that, but what else will it do?

    re: .15
    
    The copy that's circulating in this area has no such notation, nor any
    indication that classification information was removed.  
    
    I wonder if some people got a pre-release copy, from when it was
    confidential? 
    
    --bonnie

    Company Confidential?
    
    There were two documents distributed, one was the press release which I
    notice was not tagged, but a second document which started with the
    press release and went on to provide a series of Q&A and industry
    briefing notes WAS in fact tagged as CONFIDENTIAL.   I believe the
    caution is well placed....if you received the second (it starts off
    just like the first) then you cannot distribute it externally.
    

    	If we have established worldwide PROFIT centers, then this will be
    a very new and welcome change!  Let's hope it works this time.
    
    					JT

    
    
    	It was obviously improperly tagged. 
    
    	Here are the following classifiactions:
    
    	Digital Internal Use Only = Can not be distributed to non-Digital
    				    persons without originator authorization
    
    	Digital Confidential 	  = Limited Need to Know Distribution
    
    	Digital Personal	  = Distributed with accordance with local
    				    laws and absolute need-to-know
    
    	Digital Restricted	  = Only select people in the corporation
    				    have an absolute need-to-know
    
    
    
    							Mike
    							----
    	

    FYI:  
    By default, any information that is put in a VTX infobase is
    Digital internal use only.  Most people who are responsible for VTX
    infobases don't put this on every screen as it takes up too much space,
    but some of the hardcopy mailer applications do append this phrase to
    each page of text.
    
    Gita

I received a copy of the Q+A separately; there was no security classification
on it.  As far as I am concerned (and I'm a moderator), it's fair game for
posting here.

				Steve

    re: .18
    
    I did a global search in the editor and the word "confidential" doesn't
    appear anywhere on the copy of the combined press release/q&a I got. 
    There's no usage tag on it at all, anywhere.  
    
    Parts of it read like it should have been tagged for internal use, but
    it wasn't.  
    
    --bonnie

    re: .last few
    
    I checked with Juleigh Rawlings "Corporate Public Relations".

    The Press Release can be distributed inside and outside of Digital as
    needed.  
    
    The Q&A document is for Internal Use Only and should have
    been tagged as such.

    Brian B.
                    

    
    What a rathole!!!! Typical!
    
    The fact is headcount 20K, $1.2B restructuring, new org chart all
    have gone over LIVE WIRE, NPR, TV networks etc.
    
    How about digesting the info instead of nitpicking about whether it
    should be here and whether it has passed all the communication 
    police procedures!!!  Ugh!
    
    

    
    
    WHAT DO THE SHARE HOLDERS THINK ABOUT IT ------????
    
    WHAT IS THE CURRENT SHARE PRICE?
    
    And I am shouting!
    
    Patrick
    

    re -1
    Dec stock -1 1/4
    the rest of the market +43.x

stock is down over a point for the day, back to 20 1/8, which is still
higher than at the begining of the week

    thanks for quote.
    
    I see the credit agencies have just downgraded Digital's rating again,
    due to the higher risk.. I suppose this has taken the edge off any
    optimism by investors of us turning the corner!  Or is it too early for
    a definative response from the market yet.?
    
    pat.
    
    P.s. I have read and re read the annoucement and the QA. I thought it
    lays out a major reconstruction... BUT... there does not appear to be much
    comment on it... Is every one just shell shocked, or doesnt it seem to
    matter anymore?
    
    pat.

    
    	This "new" reorganization lends itself to all kinds of interesting
    speculations, which I will not go into ad nauseum. However, some
    critical points need to be made CRYSTAL CLEAR by the SLT.
    
    	- Will sales become its own function. Inotherwords, will sales have
          its own dedicated support and administrative functions all the
          way down to the local sales level?
    
    	- Who coordinates engineering functions across the groups? I cannot
          think of anything more important to our longevity as a business.
          If every group goes off on its own - the "integration" nightmares
          could kill us off pronto with our install base.
    
    	- How much empowerment will actually occur in the field? Or do we
          continue our current "must call corporate" follies?
    
    	
    Lastly, I will keep a very open mind the next several months, but on
    the surface this looks like another "whap the cage, make the existing
    birds find new perches". It is now the end of the second week of July,
    and those of us in sales still do not have a compensation plan. Anybody
    home, Enrico?
    
    		the Greyhawk

    >                  -< Digital Announces Future Plans >-
     
    Is there some other kind of plan?
    
    
    				-- edp
    
Public key fingerprint:  8e ad 63 61 ba 0c 26 86  32 0a 7d 28 db e7 6f 75
To get PGP, FTP /pub/unix/security/crypt/pgp23A.zip from ftp.funet.fi.
For FTP access, mail "help" message to DECWRL::FTPmail or open Upsar::Gateways.

    Does anyone remember Product Lines? (they were in place when I joined
    in the 80's). Reading this announcement - my first through was " well,
    we going to have product lines again".

My first reaction was, "Well, Palmer pulled the trigger and a little flag that
had BANG! written on it fell out of the barrel of the gun!" ;-)

It sure isn't as dramatic as a holding company with 4-5 subsidiaries, but so
what?  What is really of interest is:
	1.  when they say "division", do they mean the same thing other
		companies do?
	2.  what's the story with the other 3 guys hanging in space (Brebach,
		Rando and Caldwell)?  they must be waiting for another shoe
		to drop (==sell-out)
	3.  what the heck is that $300-400 million expense write-off???  when
		you throw in an item like that, the $100 million range sounds
		like something is screwed up in a major way with our financials
		(no wonder Moody's and S&P turned green at the gills!)

It would have been nice if one of the rumored sell-outs (DC or Avastor) had
been announced at the same time to make the cash situation look brighter.

								- paul

    RE: .30
    
    Hey Greyhawk,
    
    We do too have a compensation plan it's called:  SELL a bunch of stuff
    in Q1 then we'll give you the rules on how it works in Q2, back
    calculate what we owe you, tax the livin' heck out of it and then
    donate what ever is left over on your behalf to our Corporate shortfall
    commitment to the United Way.
    
    And as they say after a Space Shuttle launch, "Around around we go and
    where she stops nobody knows......."
    
    Mav

RE: .32

This isn't really like a return to product lines.  There were 19 
product lines in 1980, each of which with an independent sales and 
engineering staff.  Here we have only 2 divisions (at least so far).

--PSW

re Note 3245.30 by POBOX::CORSON:

>     	- Who coordinates engineering functions across the groups? I cannot
>           think of anything more important to our longevity as a business.
>           If every group goes off on its own - the "integration" nightmares
>           could kill us off pronto with our install base.
  
        I have a couple of responses to this:

        1) some folks, myself included, believe that Digital's
        inability to adapt to market changes began back around 1980
        when we tried to solve this "problem" by the increasing
        centralization that culminated in "one company, one
        strategy" (one egg, one basket, ...).

        2) the real force to ensure interoperability in today's world
        of open systems is the market itself.  Perhaps this didn't
        exist in 1980, but it's a powerful force now.  Our products
        must integrate not only with each other but with the popular
        products of other vendors (the de facto standards of the
        marketplace).

        It's a real problem, but the wrong cure can kill a company.

        Bob

I think i read that 60% of the $1.2B restructuring charge will be used for
employee lay-offs/severance-related costs.  Dividing that by 20K employees
to let go, that would average $36K per person.  Definitely better than 4
weeks notice-and-out for most of us!

Of course, that might get divided up based on country laws (like $80K per
European employee let go vs. $3K per U.S. employee).  And it doesn't take
into account whatever we pay to outplacement agencies for their services.
But given that some of the 20K may disappear via selling businesses, it's
at least faintly encouraging.

Some other reactions: it's good to see that Pesatori and Christ are still
riding high in the saddle--they seem to know what they're doing.  The
fact that there's no mention of a CIO would seem to indicate that IM&T
resources (programmers) will be decentralized back out to the businesses.
Is Database Systems Engineering back under Storage again?  Wow, the big
Engineering empire has finally been broken up!  Where are all the pieces
going to fall out??  The emphasis on having MCS support the installed
base would seem to really curtail more expansion into multi-vendor support.

So i guess i retract the popgun metaphor.  But still a lot of unanswered
questions.  Something still feels incomplete about this.
								- paul

    This announcement does not appear to be what is expected, but rather
    just a prelude.  The announcement has been touted as the most dramatic
    in Corporate history.  My guess is this isn't it and there is still
    more to come...  maybe next week.
    
    ..Larry

Did anyone notice that when stock went up, BP made a press release and 
stock dropped again?????????

    Hallo,
    
    13.th and 14th this week there was a country manager meeting in Boston.
    
    On the 18th, those managers are back in the countries
    and I think, will immediately or after the DVN session on 21st
    inform local people about what is comming up in detail!
    
    So I know, that next week the GY country manager is meeting
    one long day the German works council, to give information,
    whats going or not in country C.
    
    So, wait until 21st for more details!
    
    Volker

           Here's my $.03 worth:
           
           It seems as though BP did this so as not to surprise folks
           (Wall Street), like the Q3 results.  Wonder what profit/loss
           will be before 1.2B & 400K are figured in... 
           maybe a break-even, I would venture to guess.

           This note could possibly go down as the BRHIH (biggest rathole
           in history).
           
           Steve
           
           PS- So, will things REALLY change this time around?  I guess,
           at least for 20K of us, YES.

    
> Some other reactions: it's good to see that Pesatori and Christ are still
> riding high in the saddle--they seem to know what they're doing.  The
> fact that there's no mention of a CIO would seem to indicate that IM&T
> resources (programmers) will be decentralized back out to the businesses.
> Is Database Systems Engineering back under Storage again?  Wow, the big
> Engineering empire has finally been broken up!  Where are all the pieces
> going to fall out??  The emphasis on having MCS support the installed
> base would seem to really curtail more expansion into multi-vendor support.
    
    The function IM&T did not appear at the corporate level.  Engineering
    was explicitly brocken up.  Manufacturing as a corporate level function
    appears to be history.  Logistics as a corporate level function appears
    to be history.  This announcement certainly appears to kill matrix
    management.
    
                                                           

    
    The Chicago Tribune had a big article on Digital's new restructuring,
    and it either misquoted an "executive" or more bodies than 20,000 to
    fall. He said head count from sales of assets were NOT included in the
    20,000 number!! Sounds to me if it's true, we could be a 50,000+
    company with only 9-10 billion in sales. I think it's high time
    management in this company is "downsized" just like the grunts, but I
    know that will never happen as they think that is one of Dec's core
    competencies!!! Don't know of too many VP's and upper management that 
    actually bring in revenue of any sort. Just a big overhead expense that
    blows nothing, but hot air. Oh, well I guess time will tell if I'm
    right or totally wrong.
    
    Mark

The announcement stated that $1.2 billion was earmarked for restructuring costs. 
With 60% of that for employee costs and 40% for facility costs.

60% of $1.2 billion = $720 million

$720 million divided by 20,000 = $36,000.00 per employee.

It is rather hard to imagine that each TFSO does cost us that amount of money. 
Also take into consideration that one would assume a sell-off of certain 
divison-ettes would account for some part of the 20,000 workforce reduction thus 
probably reducing the number of employees to be TFSO'ed.

This cost is a "puzzlement" as the King of Siam once said.

    The article in the Nashua _Telegraph_ about the BP press conference
    quoted Palmer himself as saying the 20K layoffs did NOT include any
    losses through sales of divisions that might include Digital employees. 
    
    --bonnie

    
    Another July, another corporate strategy, another corporate structure.
    Question is, how many more July's (for Digital) will there be?  
    Not many, I suspect.
    
    Sign me,
    Cynical_Al
    

    When BP said that the revenue implied a staff level of 65000 (ie
    believe at his last DVN) that revenue obviously included Avastor, DC
    and any other bits that may now be sold.
    
    I would guess that the revenue per employee of the bits being sold off
    is higher than the company average, so that to get the average revenue
    per employee back up is going to require some fairly hefty job losses
    outside of the sell-offs.
    
    If you sell profitable bits, you end up in a downward spiral.
    
    My bet is that it is 20000 on top of the sell-offs.  Doesn't make any
    financial sense otherwise (unless we sell a loss-making concern).
    
    
    N.

    Anyone saw the WQTV68, Boston news at 6.00 pm on 14th. Under the 
    headline "DEC Cutbacks", it reported that Digital plans to reduce 
    headcount by 20K and reduce manufacturing facilities by 1/3 around 
    the world.
    
    

Greetings..  I got a call this morning from Corporate Public Relations.
(I don't recall the gentleman's name -- I should have written it down.)

The material in this note (which was original mailed along with the BP
press release) was, apparently, released in error, and should have been
labelled "Digital Confidential".  Consequently, I was asked to remove it 
from the conference.

Also, because the material originated as a mail message (as evidenced by
the comment at the foot, that it was distributed by Reader's Choice) and
the mail headers have been removed, the posting violates PP&P Section 6.54
so it has to go for that reason as well.

Cordially,

Tom
DIGITAL co-moderator

         <<< HUMANE::DISK$CONFERENCES:[NOTES$LIBRARY]DIGITAL.NOTE;1 >>>
                        -< The Digital way of working >-
================================================================================
Note 3245.5              Digital Announces Future Plans                  5 of 47
OZROCK::FARAGO "What about the Infobahn have nots?" 603 lines  14-JUL-1994 10:56
                              -< a bit more info >-
--------------------------------------------------------------------------------
    Key Messages
    Key Messages with Q&A on:
     
      	 General Business/Finance
    	 Organization
    	 Customers/Marketing
    	 Technology/Products/Services
    
    
    NOTE:   Messages and Q&A on CSD will be made available in 
    conjunction with CSD's public announcements July 18th.
    

    re. 43
    
    From the Atlanta Constitution, Friday, July 15.
    
    "The job cuts, announced to employees in an internal memo earlier, were
    accelerated to 12 months from 24 months.  When completed, Digital's
    work force will total about 65,000.  The cuts, coming on the back of
    almost 31,000 jobs cut since Palmer took the company's reins in October
    1992, don't include people Digital will lose through assest sales, the
    executive said."
    

    Well, here's the mail header off the copy I got.  Note that the subject
    line refers to July 14 press releases, and the intro text references
    both the Palmer announcment and the Q&A section.  
    
    I hope nobody's planning on blaming the people who distributed this
    message in good faith because somebody at corporate PR made a big
    mistake. 
    
    --bonnie
    
From:	ZKOMTS::ZKOMTS::MRGATE::"MROMTS::SALES::A1::PRESS" 14-JUL-1994 10:36:18.72
To:	@Distribution_List
CC:	
Subj:	#8870-July 14 Press Releases                                           3

From:	NAME: Press Releases                
	FUNC:                                 
	TEL:                                  <PRESS AT A1 at SALES at MRO>
To:	See Below


This document contains the following press releases:

1.  Palmer Announces Major Steps Toward Digital's Return To Profitability     
    Establishes Computer Systems and Components Divisions Company To Take 
    $1.2 Billion Restructuring Charge In Fourth Quarter
2.  Executive Messages/Q&A on Strategic Directions - Corporate Announcement

[This document is 21 printed pages.]

Interesting.  The previous message (20k in 24 months) was that reduction
from sales of divisions WOULD be included in that number (and hence the
number of actual layoffs would be 20k minus the headcount of any divisions
sold).

So the new message apparently is (1) it's going to happen twice as fast,
and (2) it's going to happen to a lot more people.

	paul

I think the problem is that those folks receiving this via VMSmail
may not have been notified of the ALL-IN-1 security classification
which was assigned to the message.  That classification may not
have survivied the transport out of the A1 environment or to older
A1 sites which didn't support such classification schemes.  Just
a guess.  The obvious fix for such instances is to make the 
CLASSIFICATION part of the document itself and not rely on the
ALL-IN-1 classification coding.  At least that's one approach to 
ensure that the DIGITAL CONFIDENTIAL message arrives with the 
material so marked.

    Re: 51
    
    If you read the Atlanta Constipation article - Ken Olsen would enjoy the
    fact that they stated, that BP took over as CEO 20 months ago after the
    Death of Ken Olsen.  Maybe the writer has more insite than we give him
    credit for...
    
     

Look at the announcement again:
In the 6th paragraph of the main press announcement
(which I assume it's OK to quote here?):
"The company confirmed previous reports that it is eliminating
approximately 20,000 positions." ...
"... the company's workforce will total about 65,000 at the end
of the period."

And from the Q/A:
Q	DID YOU REACH YOUR 85,000 TARGET FOR THE FISCAL YEAR?

A	... But, our expectation is that we met or exceeded our
	    employment targets.

Seems pretty clear to me, and no need to spread more doom than necessary.
* We're at ~85,000 now.
* We'll be at ~65,000 at the end of 12 months time.
* We are going to lose 20,000 employees.
* 85,000 - 65,000 = 20,000

I don't see another way to interperet that.  We will lose a TOTAL of 20,000
over the next 12 months.  That has to be layoffs and selloffs combined.

Kevin

    20K layoffs and $1.5b+500m restructuring charges is certainly
    bleak news.  

    However, I was shocked to tears last night when this was
    announced on the CBS evening news; not by the news itself,
    but behind Connie Chung was a slide of the Digital logo --
    blue, with round dots over the I's. 

    At least they didn't refer to Digital as DEC...

    I saw the announcement yesterday on CNBC.  They too used a slide
    of the blue logo.  So much for corporate identity.
    
    Rick

    >So much for corporate identity.
    
    	seems like we used to have one!  that's what the world remembers...

The Boston Globe used a red logo, but the old style with the square dots...

				Steve

    
    RE. 57
    
    Maybe CBS didn't, but CNN called us Dec numerous times.
    
    Like it makes a bit of difference anyway...
    
    Amazing, all the efforts in Q4 to ship a lot, sell a lot, collect
    a lot. ./...down the drain. Talk about futility. No wonder morale
    is zero.
    
    

    And how much did we pay for that new logo?

    re: -1   I'd venture to guess it cost us the whole company.
    
    Kinda ironic that it's 'red'  most appropriate in these times as well.
    
    chet

    I don't understand what's so confidential about the Q&A after
    release of the general news bulletin. Actually some of the
    questions are pretty good (although some of the answers side
    step the questions).
    
    Its a pity we dont know who the PR guy is who asked to have it
    retracted. The fact that it was Digital Confidential is the
    technical reason. Why it was Digital Confidential in the first
    place in the first place seems like overkill to me...
    
    re roelof

    Re: .65
    
    This is just another sign that "Corporate" is running around like
    a chicken with its head cut off.  Or to make a literary allusion,
    "a tale told by an idiot - full of sound and fury, signifying nothing."
    
    What I see coming from the top is volumes of doublespeak, mindless
    thrashing and nothing at all which is actually beneficial to
    the corporation.  It's scary.
    
    There have been a number of good things I've seen come out over
    the past year or so.  They've all been the efforts of individuals
    deciding to "do the right thing" and not wait for Palmer and Co. to
    establish direction, as it seems clear that that isn't going to
    happen.  Those of us left must do their best to ignore the circus
    at the top and get down to the real work of delighting our customers.
    
    					Steve

I have a different view.

I work in one of the groups that is succeeding (C&P, Video Segment).
I understand we just had a record quarter exceeding our revenue and
profit goals (shipped over 125,000 units in the quarter).

What the re-org is trying to do is structure the rest of the company
to be more like the groups that are working.
So what is it that's working and allowed us to succeed?
Mostly historical accident, but we've also done a few things right.

Historical accident (being in the right place at the right time):

  Video terminals have traditionally been a high volume low margin
  business, very competitive and cost sensitive.

  Most of Digital lost interest in low end video terminals about
  five years ago, so the political battles and infighting has
  greatly diminished.

  Digital still has a world class design and manufacturing technology
  base we've been able to draw on.

Doing the right things, and doing things right:

  We recognized fairly early that the VAX installed base could no longer
  support us.  We've aggressively adopted industry practices to be more
  generic and cost effective:
      Support the most popular non-VT emulations
      Use off-the-shelf PC keyboards
      Use off-the-shelf PC monitors (where appropriate)
      Offer industry standard connectors where appropriate
  Strategy: compete directly with the biggest players in the market
    on cost, features, quality, etc...

  Create focussed groups who are dedicated to one business and protect them.
  From engineering to marketing and sales, we want people who know and
  love video terminals.

  Develop and promote indirect sales channels (distributors and vars)
    [Especially critical since we're not organized to provide the
     service our customers want directly: immediate delivery of
     small quantities from stock with low overhead.]
  1-800 customer help line.
  Product dedicated sales specialists who are measured not on what
    they sell, but the number of units sold to their zip codes.  The video
    warriors don't compete with distributors, or other account representatives.
    They're goal is to help these people make sales.

What's good:
  We're in an exciting successful business competing with the best.
  It's not all gloomy.  Some big parts of Digital are really succeeding.

What's different or "not so good":
  It doesn't feel very much like we work for a large systems company
  anymore.  We're in the terminals business.  I won't be surprised if
  we're spun off or sold.

- Peter

      
    
    Here is a quote that I feel really assess the situation in DEC.
    
    
    We tend to meet any new new situation by re-organizing, and a wonderful
    method it can be for creating the illusion of progress, while
    producing confusion, inefficiency and demoralization.
    
                     "Petronium"
    
    
    
    Jeff

Errr. . . I think that should be "PetroniuS" as
in Petronius Arbiter c. 66AD

    Please... not again!
    Ana

    My first comment in this notes file...
    
    I'm ona contract to a retail company in Cincinnati.  Focus of the
    organization of the business units in this company is to keep them all
    self-contained so that expansion and divestiture are easily
    accomplished (easy to buy and sell units).  New Digital organization
    seems to match that model.
    
    Brian Aylward, Cincinnati

    	At HLO2 we fly a nice blue Digital flag with square dots.  I like
    it.  Any quesses why they wouldn't invest in a new one??  Do I still
    work for DEC??
    					JT
    

When the logo change was announced, it was specifically stated that we would
NOT be immediately replacing signs (and flags, I presume) and that we should
use up old stationery.

				Steve

>                     "Petronium"
    
    Isn't that the guy who invented oil?   ;^)

>    <<< Note 3245.74 by GLDOA::FULLER "Never confuse a memo with reality" >>>
>
>>                     "Petronium"
>    
>    Isn't that the guy who invented oil?   ;^)


  I thought it was on the periodic table. 8^)

re .72:

At ZKO we're always in the vanguard.  We've had a burgundy flag for a while.

    
    	Petronium -
    
    	He's the guy who invented VPs!!!! Geez, get your facts straight.
    
    
    		the Greyhawk

>    	Petronium -
    
>    	He's the guy who invented VPs!!!! Geez, get your facts straight.

  Wasn't he that Roman senator Marcus Petronium?  He was always seen with his
  man-servant Superfluous.

    re: Petronium
    
    ...  Here and I thought it was Intel's next chip ...
    
    Steve

    re: .- quite a lot, when we were still talking about the topic title...
    
    	I have read and reread the annoucement.  Am I being totally naive,
    or does it look like the 'Computer Systems Division' is really the New
    Digital (Palmer's favourite bits), and all the rest can go swivel?
    
    It looks like retrenching in the face of an enemy siege.  Move the
    King, the favoured courtiers, the food supplies and the best soldiers
    into the inner courtyard, and let the barbarian hordes overrun the
    villagers and farmers.
    
    I feel like a villager, holding a hoe, facing Genghis Khan's best.
    
    Gulp.

>    	I have read and reread the annoucement.  Am I being totally naive,
>    or does it look like the 'Computer Systems Division' is really the New
>    Digital (Palmer's favourite bits), and all the rest can go swivel?

Consider (from yesterday's WSJ, page B3)

    ...

    Enrico Pesatori, vice president and general manager of Digital's
    new Computer Systems Division, said the unit plans to eliminate
    14,000 of it's 35,000 jobs in sales, marketing, manufacturing
    and engineering.  The cutbacks represent the lion's share
    of the 20,000 jobs Digital plans to eliminate by next July 1
    as it cuts employment to 65,000 people.

    ...

This is "favourite"?

The employment level is probably moving to reflect what can realistically
supported, though I'd personally like to see more emphasis on how we're
going get revenue over the long haul - a sentiment that was echoed in
the article:

    ...

    Although Mr. Pesatori's comments yesterday gave further details
    about Digital's restructuring, "I would have liked more specifics
    about where they're going to generate their revenue,", said
    Franc Romano, an analyst with Aberdeen Group in Boston "I still
    don't know where they're going."

    ...

	On 19-Apr-1994 I sent the following to BP:


         In your Q3 statement to the press you spoke of the need 
         "...to achieve a competitive cost structure as quickly as 
         possible".  You went on to describe your instructions to 
         senior managers which include "...accelerate our 
         restructuring efforts" and you added that "We will also 
         consider further restructuring to achieve our goals".
         
         From the field, in Europe, may I make some observations?
         
         I am sorry to say this, but I was saddened and surprised that 
         you made no mention of having plans, or intentions, to grow 
         revenues as part of achieving the competitive cost structure.  
         This is not merely a personal observation, it has been the 
         subject of recent comment from colleagues in at least three 
         different locations.  The most direct of these comments was 
         "If we reduce the costs to the limit then they'll meet the 
         revenue figures -- unfortunately at that point they'll both 
         be zero".
         
         There is also great dismay amongst colleagues at talk of 
         "further restructuring".  In Europe we have had three 
         restructures in two years, and it has appeared that for each 
         one too little time has been given for the benefits to 
         appear.  We were forewarned of the current one just after 
         Christmas.  Mr Damiani said then that it would be a bottom-up 
         restructure that would be about 60 days in the planning, 
         followed by up to 18 months of implementation.  The effects 
         on the field of this news has been, in my view, far from 
         surprising -- distracting speculation about who goes and who 
         stays, a lot of worry about job security, and a loss of 
         enthusiasm, motivation and morale.
         
         In fact, if morale is a factor in making successful business 
         then I am not surprised at the loss we posted -- I have never 
         experienced such low morale in my 32 year working life.
         
         Thank you for taking the time to read this.
         

    The relevant part of the response from Corporate
    Employee Relations, dated 22 June, reads, and I 
    quote in full:

  	"Your comments from the field in Europe are understood.  
    	 We clearly have a lot of work to do, but I am sure if 
    	 we can re-engage our employees, we can make the Company
    	 successful again."

    re .82:
    
  	"Your comments from the field in Europe are understood.  
    	 We clearly have a lot of work to do, but I am sure if 
    	 we can re-engage our employees, we can make the Company
    	 successful again."

    I think they missed out a bit.  It should read
    
    	... re-engage our employees AND MAKE A PROFIT, we can ...
    
    Martin

    I guess what the analysts are saying, as many internal people too, is
    that  we  have  announced  a  new  structure  but  no detail  on  new
    strategies, so they (we) are still waiting to hear more.

    I for one would like to hear more about things like:
        
    - We  know  were are moving more to channels, which ones (VARs, retail,
    agents, distributors, private label, all of the above?)
    
    - How?    (Is  SBU  marketing=channels marketing?)
    
    - With which products (high end?    commodity-like?)
    
    -  Are  (can)  we really going support well three operating  systems?
    
    - And  what  about layered SW products, which ones internal and which
    ones 3rd party?
    
    - Have we established  a business model for this new Digital, what is
    our target gross margin, cost of sales and G&A?
    
    I would expect that all  the  above questions have being asked within
    the groups that are reorganizing the  company,  but  it would be very
    positive, if for once everyone knew what  our  goals,  objectives and
    strategies are.
    
    

    
    The response at the end of .82 clearly contains a transcription error.
    
    The word "employees" in the last sentence should be replaced by "brains".
    

>
>    The relevant part of the response from Corporate
>    Employee Relations, dated 22 June, reads, and I 
>    quote in full:
>
>  	"Your comments from the field in Europe are understood.  
>    	 We clearly have a lot of work to do, but I am sure if 
>    	 we can re-engage our employees, we can make the Company
>    	 successful again."
    
    
	And what is the definition of re-engage
    
	as the noun 1. To obtain or contract for the services of ; employ
    		    2. To contract for the use of                ; reserve
    		    3. Obtain and hold the attention of          ; engross
    		    4. To require the use of 			 ; occupy
    		    5. To pledge ; especially to promise to marry; betroth
    	            6. To meet in or bring into conflict
    		    7. To cause to interlock or mesh
    		    8. To please or attract			 ; win
    		    9. To occupy or involve
    		   
    	as the adjective "Actively, morally or politically commited as to a
    			  political ideology [from the french 'committed']"
    
    
    	Engage warp drive bobby, 
    
    	"Captain, I cannot change the laws of Physic's " came the reply
	(in a scottish accent please)

    
    	Having read now the last forty notes in this conf. I can only add
    that Digital's Future Plans are (drum roll, please)
    
    
    
    
    
    
    
    
    	To Be Continued....
    
		
    		the Greyhawk

    In a press article about the 20,000 head reduction there was a comment
    from Nick Earle, Hewlett Packard European marketing and channel
    director.  He thought the move would be bad for Digital, "We're
    talking about the future of the Alpha chip."
    
    Isn't it nice to have our competitor concerned about our long
    term success with Alpha.
    
    Calvin
      

    
    <<< Note 3245.88 by POBOX::CORSON "Higher, and a bit more to the right" >>>
                          -< My Phazer is on Stun, Mr. Zulu >-
                                                       ^^^^
    
    	Hey, I always thought it was Mr Sulu, Did I get it wrong again?
                                        ^
    
    				Malcolm.

re .89 HP comment

Isn't that a nice 'positive' way to downplay Alpha.

Good politicians do that all the time in Digital's internal battles.

--Ritva

    
    	Malcolm -
    
    	Absolutely correct. These "modern" keyboards have conspired against
    	me by putting the "Z" almost directly below the "S". I will now
    	retire to my shrine and committ Hari-Kari.
    
    		the Greyhawk

    Does anybody knows or has heard in this very changing environment
    what is going to happen with the following software products:
    
    - LinkWorks
    - AccessWorks
    - TeamLinks
    
    Thanks in advance for your comments.
    
    Carlos

    
    RE: - 1, TeamLinks 
    
    TeamLinks V2.1 has just shipped.  People are working on V2.2 at the moment
    and think about V3.0.  Nothing bad has happened to the department.
    
    See ABBOTT::WINDOWS_OFFICE for more information.
    
    Ta,
    
    Mike

The information repository has a section that defines the future of all of our 
software products.

Try SS as the menu pick.

Bob

re.94:

From where I sit (UK Marketing) we appear to be de-investing in software
products, which in turn is a continuation of a trend started a couple of 
years ago. Presumably we need to continue the engineering effort to satisfy 
our installed base whilst we migrate to third party alternatives.

Dave.

    Re .94...I think these products are continuing components of our new
    focus on middlewware products that enable networked client/server
    platforms.  I believe I heard Mr. Demmer say they were important,
    during a recent Software update presentation by nim.
    
    Mark
    

    RE .94
    
    In a document I just received entitled CSD Guidebook, under Layered
    Software it reads:
    
    "Digital will continue to offer common development tools and layered
    software across all three operating systems to make it easy for
    partners to extend their offerings into new markets.
    
    Increasingly, middleware will drive system sales and CSD will look at
    ways to package and promote Digital's client/server integration
    platforms such as ACCESSWORKS for database integration and PATHWORKS
    for PC LAN integration.
    
    CSD also plans to leverage Digital's lead with object-oriented
    integration framework such as LinkWorks and ObjectBroker -- and the
    growing momentum of the Common Object Model (COM) initiative with
    Microsoft."

Our software serves one purpose: to help us sell our software. 

I've been supporting our database products for five years, the last three as 
an "IM (Information Management) Partner." For most of those three years, the IM 
Partners have been trying to convince the Corporation to port Rdb to UNIX.

Evidently, we've been successful, though that egg's not supposed to hatch til
later this summer.  The battle to get Rdb -- one of top, revenue-wise, layered
software products -- to other UNIX platforms seems less likely to end in 
victory.  The reason, I'm guessing, is that wouldn't help sell our hardware.

Bruce

re: my last (.100)

�Our software serves one purpose: to help us sell our software. 

I meant, of course, "to help us sell our *hard*ware."

Bruce

    re: 100,101
    
    Actually, you got it right the first time.
    
    Software products must stand on their own merits as profitable items
    for the company to develop and distribute.  It is a tremendous mistake
    to view software primarily as a means to "leverage" hardware sales.
    
    Customers don't *want* to be leveraged.  The success of Microsoft and
    Intel as independent companies ought to make that point very clearly.

    
    	And, since when, has Digital's decision-makers cared *what* customers
    want?
    
    	Please do not hit me with making software profitable when we have
    just spent the last three months *giving* it away to sell hardware, ala
    the now field-famous "momentus software upgrade program".
                         
    		the Greyhawk
    
    

    
    It's not that black and white. Take IBM 2780/3780 emulator, it's
    difficult to imagine it as a volume seller but you have to have it to
    leverage rest of some projects. The leverage argument got misused in
    the past , but there is some truth to it in some situations.

    			wlodek

    Hi Carlos,
    
    re .94
    
    >    what is going to happen with the following software products:
    
    >    - LinkWorks
    >    - AccessWorks
    >    - TeamLinks
    
    LinkWorks is gaining ground and in fact customers are buying new
    machines (Alpha's) to install it.  This product is gaining ground very
    fast so be positive.
    
    Regards,
    
    Sunil

    re .104
    
    There are different types of software.  Some software is intrinsically
    linked to the hardware.  In this category are:  O/S's, compilers,
    DECserver software, DECnet SNA Gateway, etc.  I think we have some good
    stuff here.  You could never get rid of this stuff without getting out
    of the hardware business associated with it.
    
    The "other" software, things that are Digital me-too products, well,
    this is where the debate starts.

re: .102
�  re: 100,101
�    
�    Actually, you got it right the first time.
�    
�    Software products must stand on their own merits as profitable items
�    for the company to develop and distribute.  It is a tremendous mistake
�    to view software primarily as a means to "leverage" hardware sales.
�    
�    Customers don't *want* to be leveraged.  The success of Microsoft and
�    Intel as independent companies ought to make that point very clearly.

I was trying to be a little ironic (check my personal name), but if I must,
here it is in black-and-white (from VTX IR,2,SS):



        AN OVERVIEW OF DIGITAL'S SOFTWARE STRATEGY              15-JULY-1994
        ------------------------------------------              ------------


                AN OVERVIEW OF DIGITAL'S SOFTWARE STRATEGY

        Digital's primary line of business is the worldwide manufacture
        and sale of leadership, networked computing systems. Digital's
        software strategy is to provide world-class networked software
        for multi-vendor, heterogeneous environments, and market pull
        and leverage for Digital's networked computing systems.
 
 

Bruce

    re: 107
    
    
    That policy will lead straight to a chapter 11 (or chapter 7)
    bankruptcy proceeding in short order.  It represents a blatant denial
    of market trends which have been plainly obvious for several years now.
    
    You might study the example of Novell Netware - a fairly widespread
    network software product, which is generally not even sold by the same
    company that sells the hardware platform that it runs on.
    
    You might also pay attention to CISCO, which does sell an incidental
    piece of hardware, to run the multi-protocol router software that is
    their actual product.
    
    And of course there are hundreds of software-only companies that will
    supply compilers, and even special purpose operating systems for
    Intel-based platforms.  There are even a few that do hardware-specific
    software for PDP-11's, VAX's, and ALPHA's.  The ones that last all seem
    to be making pretty good money.
    
    
    The days of giving away software to sell hardware are coming to an end.
    
    
    The days of giving away consulting services to sell hardware are coming
    to an end.

Re: .108's comments on .107

I believe we agree that our software strategy is not what it would be if *we* 
were "in charge."

Bruce