Conference 7.286::digital

    {I'd sure feel better 'bout getting axed if they were still offering
    this...<sigh>}
    
                 Worldwide News                      LIVE WIRE

         Digital to provide incentives for more U.S. employees to leave

  Effective September 4, Digital is introducing a Transition Financial Support 
  Option (TFSO) package for the U.S., with the initial implementation expected 
  in September.  The plan is to complete the U.S. portion of the company's 
  downsizing work as soon as practical. 

  This is part of a company-wide downsizing effort, which depends upon 
  business workplans to identify jobs that need to be eliminated during 
  Digital's restructuring process.   All decisions are being made on a 
  business-by-business basis, and they will need to be approved by Digital's 
  Cross-Organization Transition Committee.  Any jobs identified will come from 
  organizational consolidations, work that no longer needs to be done, 
  overstaffing, etc.  With the overall effort, the company plans to bring the 
  total population into better alignment with workplace requirements. 

  In July, Digital posted its first loss despite months of hard work to cut 
  costs, including a TFSO package that was accepted by about 3,000 employees.  
  This continued downsizing effort has been caused by a business downturn and 
  our increasing need to be more competitive. 

  The fourth quarter loss resulted from the company's decision to set aside 
  $400 million for "restructuring" charges.  This money will be used primarily 
  to help offset the costs of eliminating unnecessary jobs, retraining and 
  redeploying employees, and consolidating some facilities. 

  Everyone affected by this program will be given up to four weeks to decide 
  whether or not to accept the financial bridge or to find a new job within 
  the company.  If a job match has not been made in four weeks, those who 
  choose to remain with Digital will be subject to temporary assignments and 
  to any other changes in the transition program, as business conditions 
  dictate. 

  The new program uses the same elements as the first TFSO, including a 
  financial bridge based on years of service and the continuation of benefits 
  for one year.  The lump-sum financial bridge, which is different from that 
  of the first TFSO, will be based on the following: 

    0 -  2 years of service  -- 13 weeks pay
    3 - 10 years of service  -- 13 weeks of pay, plus 3 weeks pay              
                                for every year of service between              
                                3 and 10 years
    11 - 20 years of service -- 37 weeks of pay, plus 4 weeks of 
                                pay for every year of service 
                                between 11 and 20 years

                             --	77 weeks of pay will be the 
                                maximum financial bridge 
                                available

  In addition, the employees who are offered and accept the package will be 
  able to maintain their medical, dental and life insurance coverage for one 
  year.  Formal outplacement assistance will also be available and, where 
  applicable, five-year acceleration of any restricted stock options will be 
  available. 

  "Our basic goal continues to be to offer a voluntary package to help 
  impacted employees bridge to their next career or life goals,"  explains 
  Jack Smith, senior vice president of Operations.  

  "There are many areas in which we are trying to cut expenses. Almost every 
  cost center across the company has developed significantly reduced budgets 
  for FY91.  Plus, we are looking at more ways to reduce discretionary 
  spending.  The people part of the plan does not represent the entire 
  formula, although it is the most visible and most difficult of our decisions.

  "The continued commitment from all managers and employees is critical for 
  our success.  We need everyone to take the initiative to reduce costs 
  wherever they see them."

  More information and details about the program will be communicated to 
  affected employees.

    Thanks for the information and to those who sent me mails.  I have my
    appointment scheduled for Monday at 9am sharp and this is useful for
    some of my needs.

    Some of these layoffs are hard to understand.  I am in a group of folks
    call DS4s who (used to) sell custom software and consulting. As we are
    moving to the PS/SI group it appears that 60-75% of us are being let go.
    If SI is one of the big 4 focus's of the company, then who do they
    expect to sell it?

    I'm not bitter.  At least there is more than 9 weeks Still available.

    Good luck to the survivors.

Please post a summary if possible... and pointers to the detail notes in
this conference.

Thanks-

Lee (who is not sure what 'round' of packages we are on... too dizzy)

    
    
    
    I realize that this may be a little late, but here's the Boston Globe
    article that talked about the FIRST TFSO package.
    

    
 Digital - A voluntary severance plan
	{The Boston Globe, 13-Sep-89, p. 69}
	{By Jane Fitz Simon, Globe Staff}
	[This is the entire article - TT]
   Faced with sluggish sales and too many manufacturing employees, Digital
 Equipment Corp. for the first time will offer voluntary severance to
 Massachusetts-based employees.
   The Maynard computer maker, which takes pride in having never had a layoff,
 will offer a generous "financial support package" to 700 employees on
 condition that they agree to leave the company.
   Digital disclosed the plan yesterday in part to quell rumors that layoffs
 are taking place. A spokesman for the company said that there continue to be
 no plans for any layoffs.
   Digital's stock, the fifth most-heavily traded stock on the New York Stock
 Exchange, closed yesterday at 99 1/2, up 2 1/4.
   Company officials last month confirmed the existence of a "working document"
 that calls on nine major departments to reduce head count by 25 percent by
 July 1991 through transfers and attrition. If implemented, the plan would
 affect an estimated 7,500 employees.
   Digital is suffering from a slump in US sales. Declining opportunities,
 intense price competition, and changing market demands are pressuring Digital
 and other suppliers of mid-range computer systems to reduce expenses and
 streamline their operations. In the fourth quarter ended June 30, the
 company's profit was off 22 percent from a year earlier.
   Digital's voluntary severance program is being offered to 500 employees
 located at a former systems manufacturing facility in Salem, and 200 employees
 based at other Digital facilities whose jobs are related to the affected
 business unit. The assembly and testing that used to be done by the
 manufacturing unit is now done at Digital plants in Phoenix, [Arizona, - TT]
 and Puerto Rico, said company spokesman Jeff Gibson.
   Since November 1988, 600 other employees who worked at the Salem
 manufacturing operation have been placed in other jobs within the company,
 Gibson said. The Salem facility, located on Northeastern Boulevard, houses
 about 1,200 other Digital employees who work for other business units. They
 will not be affected by the voluntary severance program.
   Digital has no plans at this time to offer the program to any other
 employees, said Gibson. But he did not rule out the possibility that it could
 be offered to other employees in the future.
   "It's a theoretical package that would be examined on a business-by-business
 basis if any other group decides to pursue it," said Gibson.
   The financial package is a new option in Digital's ongoing "work-force
 transition," a plan to reduce the manufacturing payroll by 4,000 this year
 through redeployment and retraining.
   Gibson said Digital offered a similar package in 1986 and 1987 to several
 hundred manufacturing employees in Arizona and Puerto Rico. But the package
 has never before been offered to employees in Massachusetts.
   Employees are being told of the voluntary option this week. Beginning in
 October, they will have 13 weeks to decide whether or not to accept the
 financial package.
   The package provides an allowance based on years of service. Employees with
 up to two years of experience will get 40 weeks of pay. Those with three to 10
 years will receive 40 weeks, plus three weeks for each year between three and
 10 years. Employees who have worked from 11 to 20 years will get 64 weeks of
 pay, plus four weeks of pay for each year served between 11 and 20 years. The
 maximum award is 104 weeks of pay.
   For those who accept the financial support package, Digital will maintain
 medical, dental, and life insurance coverage for one year. There will also be
 a limited acceleration of any restricted stock options employees may own.
 Outplacement assistance will be available.
   Gibson said that employees who do not opt for the program will be expected
 to look for other positions in the company while efforts are made to retrain
 them. There are manufacturing positions available elsewhere in the company, he
 said.
   Digital expects several hundred employees to accept the financial package,
 Gibson said. The company employs 125,800 worldwide, with 33,600 in
 Massachusetts.


    

    I've gotten several inquires on my monday meeting and the use of the
    information so here's some highlights:
    
    - Meeting really focused on the initial 9 weeks.  The Package (TSFO) is
    the lump sum that follows the 9 weeks.  It was lightly covered and I
    did get a general information Q&A handout, but I will not receive my
    personal package until later this month.  I will have almost to the end
    of my 9 weeks to review it and decide if I want to accept it.
    
    - My information was not useful in the meeting.  Both my boss and HR
    pointed me in the direction of a central group that I need to write to
    with my comments.  This is to happen prior to the end of the 9 weeks.  
    
    My thanks go to those who supplied information or sent caring notes.
    
    Good luck to all of you.
    
    Joe

    Let's see if this one make it to 9am.
    
    I am also seeking information/names & numbers of lawyers who have dealt
    (successfully) with DEC (from the tsfoed employees side) for reference 
    information.
    

    This note aroused my curiosity, so I spent some time late Friday
    scanning this conference. The historical perspective was interesting.
    
    First, the salary freeze that started the whole thing, Jul-Dec 89
    (I didn't jot down any of those note numbers). Then,
    
    598.79, .92, .132, .144, .173, .211
    1271.12, and then 1333 (which is where I stopped)
    
    At some point, given some idle time some week-end, I may finish the
    scan and will post a 'complete' list.
    
    	Dave