Compaq set to cut 700 Scottish jobs

LONDON: The US No. 1 PC maker Compaq Computer Corp is shedding 700 jobs at

its Erskine computer assembly plant in Scotland and will outsource the work to a

Taiwanese-owned company based in the Czech Republic, The Financial Times

reported on Monday.

The job losses were the first big casualty of the US downturn for Scotland's

electronics industry, its biggest manufacturing and exporting sector, in which

US companies have invested heavily. About half of Scotland's output of

computers, semiconductors and electronic components came from US-owned plants,

the FT said in a report on its Web site.

On March 16, the PC maker said it would cut 5,000 jobs or seven per cent of

its workforce worldwide in a bid to slash costs, after it warned that its

first-quarter earnings would fall short of expectations. These cuts followed

similar big moves by companies such as networking giant Cisco Systems and number

two mobile phone maker Motorola Inc., which currently employs 7,000 staff across

Scotland.

However, Compaq said it would remain a significant employer in Scotland,

where it will continue to employ more than 2,400 people at a plant in Ayr and in

sales and marketing posts across the country, according to the FT.

(C) Reuters Limited 2001.