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Honeywell Bull Cutting About 1,600 Jobs

January 7, 1989

BOSTON (AP) _ Honeywell Bull Inc. announced Friday it is cutting 1,600 jobs in the United States, a reduction analysts said reflects weakening demand for the company’s large mainframe computers.

The cuts will reduce the company’s workforce about 6 percent and will include manufacturing and administration jobs at several plants in Massachusetts and in Phoenix, Ariz., Honeywell Bull said.

The company said it hopes to achieve the cuts through early retirements and attrition in addition to layoffs. It said 900 employees are eligible for early retirement at the Billerica-based company.

Honeywell Bull will have a worldwide workforce of 18,100 after the cuts.

Analysts said the cuts reflect a decline in the mainframe computer market, geared toward sophisticated scientific applications used principally in defense and aerospace industries.

″It’s a recognition of what’s going on,″ said Jeremy Tennenbaum, an analyst with Salomon Brothers Inc. in New York. ″When all is said and done the market for scientific computers outside the Defense Department and big aerospace companies has yet to take off.″

″The weakness of federal demand for large systems means it’s going to be tough sledding for everyone in the industry, especially if you’re a new entrant,″ he said.

Honeywell Bull said the reductions are not linked to an ongoing ownership restructuring of the company, which was formed in March 1987 as a joint venture of France’s Groupe Bull, Honeywell Inc. of Minneapolis and NEC Corp. of Japan.

Groupe Bull last week acquired 22.6 percent of the company from Honeywell, giving it a 65.1 percent ownership. Honeywell owns 19.9 percent and NEC 15 percent.

Honeywell Bull President Roland Pampel said the layoffs, scheduled to be completed by mid-March, were taken to try to improve the company’s competitive position by cutting costs and improving productivity.

Pampel, who took over Honeywell Bull last July, said the change marks a continuing consolidation. ″We’re streamlining it, reacting to things we must do from a productivity point of view,″ he said in an interview.

Pampel denied that the change indicated a slump in the mainframe market, and said a new line of computers introduced in November was ″very well received by customers.″

Honeywell Bull, which moved to Billerica last September, has offices in the United States, Italy, the Great Britain, Canada, Australia, Mexico and Asia. It reported 1987 profits of $17.4 million, less than 1 percent of revenues of $2.06 billion.

Honeywell allied with Groupe Bull and NEC to take advantage of the similar computer designs of all three companies. In the 1960s, when Japan and Europe were minor forces in the computer industry, Honeywell had licensed designs to the two companies.

The three parent companies remain independent apart from Honeywell Bull, which is completing a restructuring expected to include a name change.

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