700 Commodore Layoffs

The New York Times

August 22, 1985,

Commodore International Ltd., the home computer manufacturer, announced yesterday the layoffs of 700 employees worldwide, or 15 percent of its work force, calling the action ''an ongoing streamlining of its business operations.''

The new layoffs, which will be made in all parts of the company's operations, continue a trend that began in July 1984. With the latest furloughs, the number of Commodore workers cut through layoffs, automation or planned attrition will have dropped to 3,800 from a high of 6,700.

Last week, the company said it expected to report a loss of around $80 million for its fourth fiscal quarter ended June 30, primarily because of $50 million in inventory writedowns. The company also expects ''somewhat'' lower sales, as well as a loss from operations of about $25 million and one of about $5 million from special items. The company, however, has predicted that results will be profitable by the end of 1985.

During the corresponding period last year, the corporation, which is based in West Chester, Pa., earned $33.1 million, or $1.07 a share, on sales volume of $168.3 million.

Although Commodore has survived the shakeout in the home computer market, it has now posted two consecutive quarterly losses, following six years of earnings gains. Its deficit was $20.8 million in its third quarter.

Commodore's optimistic prospects are related largely to its long-awaited Amiga computer, which was introduced in July and is scheduled to begin shipments late next month. The Amiga will have a base price of $1,200, marking a change in strategy for the company that became known to millions for its relatively inexpensive Commodore 64 home computer.