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Tandon to Restructure, Trim Payroll 10 Pct

August 25, 1986

LOS ANGELES (AP) _ Tandon Corp. said Monday it is restructuring into two units dealing with its disk-drive operations and its new personal computer, and will furlough 50 workers.

Besides the layoffs, the company said it plans other cost-cutting measures designed to reduce the company’s payroll expenses by about 10 percent.

The layoffs are the latest retrenchment for Tandon, which earlier this month eliminated 225 jobs by closing its San Jose disk-drive facility and trimmed another 270 jobs in Southern California. The new cuts will come primarily from the corporate and administrative staff, the company said.

The company now has a domestic work force of about 1,000, compared to 2,450 in March 1984.

The steps come as Tandon is trying to reposition itself as a personal- compute r maker, instead of a manufacturer of disk drives, devices that record and retrieve computer data.

In recent years, Tandon’s disk-drive business, which has been shifted to its plants in Singapore and India where wages are lower, has been unprofitable.

In the first three quarters this year, Tandon lost $17.5 million on sales of $157.7 million, compared to the year-ago period when it lost $50.2 million on sales of $214.12 million.

The company said it expects its financial results to remain depressed at least through this year as it lines up dealers to handle its personal computer, which was introduced in July.

In the restructuring, one division of the company will be devoted to developing, manufacturing and marketing Tandon computers and parts to other computer manufacturers and distributors. The second will sell disk drives and sub-systems through outlets that don’t carry the Tandon computer line.

Coordination of the units will be handled by a new committee headed by the company’s president and chief operating officer, Dan Wilkie.

That move completes the shift of all operating control to Wilkie from the company’s founder, Sirjang Tandon, who as chairman and chief executive will remain in charge of strategic planning and policies.

The shift of power began last November when Tandon hired the 54-year-old Wilkie, who oversaw worldwide production of IBM’s personal computer. Wilkie was the first of several former International Business Machines Corp. executives hired by Tandon as it prepared for its push into personal computers.

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