At A New Behemoth, Blood On The Floor

MERGE AND PURGE? DIGITAL EQUIPMENT shareholders will vote June 11 on a $8.5 billion combination with Compaq Computer. If approved, the two will form a $38 billion behemoth selling everything from handheld PCs to technical services. What the new giant won't offer is job security: After the merger, analysts say, Compaq is expected to eliminate 15,000 of Digital's 54,000 employees. The mass layoff will mean a $1.5 billion to $2 billion restructuring charge. Meanwhile, Compaq could be making additional cuts. It has already trimmed 1,000 jobs through attrition, but insiders expect cutbacks at Compaq and its Tandem Computers subsidiary to eliminate a further 2,000 jobs.

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