LOWELL, Mass. — Wang Laboratories, projecting an operating loss in its fiscal fourth quarter, said Wednesday that it will immediately lay off 1,600 employees, or 5% of its work force.
The computer maker said it also canceled salary increases for six months.
"The layoffs affect employees across the board: manufacturing, administration, clerical and professional--everyone," Wang spokeswoman Myra Barradas said. She added that 1,000 of the layoffs will be in Massachusetts.
"The company has tried to find as many ways as possible to avoid such a measure, but conditions in the industry haven't turned around as we expected them to," she said.
After Wang's announcement, the company's class B stock fell $1.125 a share to $15.50 on the American Stock Exchange, where it was the most active issue.
Wall Street's concern also spread to other minicomputer makers listed on the New York Stock Exchange, where Digital Equipment tumbled $5.625 a share to $99 and Data General $2.50 to $34.
A loss in the fourth quarter would mark the low point of an already dismal year for Wang, a maker of mid-size computers, word processors and other automated office equipment.
In contrast to its record of consistently strong growth in previous years, Wang's earnings in fiscal 1985 initially failed to climb as expected and then began spiraling below year-earlier results.
Wang attributed its weaker performance to the effect of the strong dollar on its overseas results and to an industrywide slump, particularly for medium-size computers used by businesses that are now reducing their spending plans because of the sluggish U.S. economy.
But analysts have said that increased competition, together with some marketing and management mistakes at Wang, are also contributing to Wang's problems.