Enrico Pesatori, VP and general manager of Digital's computer systems division, quit suddenly last week just one day before the company revealed that its Q4 results will be well below expectations.
The company is blaming the downturn on poor PC sales, overstocking, and sales problems in continental Europe. It has been forced to cut 7,000 jobs, and will implement a restructure costing $475 million. Half the jobs will go in the US, but the company said the UK would escape.
According to analysts, the cuts are a huge blow to the company, which was just struggling its way back into the black, and they cast doubt on its long-term recovery. Speculation is rife that it will sell off its PC division after CEO Bob Palmer described its performance as 'unacceptable'.
One UK source said: 'The problem is mismanagement at a fairly high level - specifically management from Geneva.'
The company has now appointed Richard Jones, Digital UK and Ireland MD, to head its Alpha business in Geneva. He will split his time between the UK and Switzerland. James Stevenson, newly appointed systems business unit manager, will take over some of Jones' UK responsibilities (PC Dealer, 3 July).
Jones aims to double the number of Digital's direct customers in Europe, and will restructure the company's indirect European channel. He said: 'Digital went too far in Europe and the UK, and reduced its direct sales customers by too much. But we are not going to drop anyone in the UK.' Jones, a former IBMer who was credited with the success of the AS400 channel, is negotiating to win two IBM partners - SSA and JBA.
He refused to be drawn on the issue of management problems. 'Digital in the US singled out the UK as being in good shape,' said Jones. 'The problems lie with the German-speaking economies.' Germany, Switzerland and France account for about one third of the company's European business.
See Leader, Page 21.
Telco also announced series of initiatives to drive digital growth in the UK
Nana Baffour opens up on Getronics' mammoth acquisition of Pomeroy
Analyst predicts SaaS will remain the dominant segment in the market as it grows 17 per cent in 2019
NSS Labs claims vendors are refusing to have their products tested effectively and are trying to restrict its access