Jobs go at Compaq's Scottish factory

The effects of the American economy slowdown hit the UK on Monday as US computer maker Compaq announced that it was laying off 700 workers at one of its Scottish factories.

The job cuts are part of Compaq's attempts to save between $500m and $600m per year by cutting 5,000 jobs worldwide. The 700 jobs will be lost at Compaq's factory at Erskine, Renfrewshire, as the company plans to outsource some of its manufacturing operations.

Compaq will carry on making some equipment, including servers and some made-to-order desktop machines, at the Erskine plant. The company, which also runs a second factory in Ayr, will continue to employ 2,400 employees in Scotland.

As the world's second largest computer company, Compaq is at risk from any slowdown in IT spending. A recent Dataquest survey predicted that PC unit sales in the United States will rise just 5 percent in 2001 -- a figure which would sharply diminish if America slipped into recession.

In announcing job cuts, Compaq is following the lead of industry giant Dell, which decided to axe 1,700 permanent staff in February.

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