AST Employees Learn of Layoffs

Employees at AST Research Inc. learned in an e-mail message and in newspaper reports that 37% of the work force would be cut as part of a massive worldwide reorganization. Top executives and managers told about 1,100 individual workers that they would be let go, some starting immediately. The cuts, reducing the staff to about 1,900, are aimed at helping to revive the money-losing company, which once was part of the computer industry’s upper echelon and had more than 6,500 employees. Backed by the financial muscle of its parent company, Samsung Electronics Corp., AST plans to consolidate manufacturing, eliminate inventory backlogs, focus on strong markets and abandon marginal segments. “We are confident that by the end of 1999, we can reach the break-even point,” S.T. Kim, AST’s chief executive, said in an interview. The draconian action is expected to put costs in line with falling revenue at a company that has lost $845 million over three years. Industry analysts hailed the move, but Kim and other top executives were thinking about the immediate task ahead of them: boosting morale. Today, they plan to circulate among those who work in the three buildings that make up the company’s headquarters in Irvine to explain the reorganization and reassure them that AST is now on the right track. On Friday, Kim will address a meeting of all remaining employees.