Compaq to cut 5,000 jobs

Compaq Computer Corp. recently lowered its revenue and earnings outlook for the second straight quarter and disclosed several management changes as well as plans to cut 5,000 jobs in its PC, supply chain and marketing operations.

The cutbacks will reduce Compaq’s workforce by 7 per cent and will be accompanied by a combination of its corporate and consumer PC units into a single product group. The computer maker said that move is aimed at lowering internal costs, simplifying its product line and better positioning the company for combined home/office computing applications. Compaq CEO Michael Capellas blamed the newly-lowered estimates on the “continued overall weakness in the economy” and a reduction in capital spending on IT by corporate users. Demand for desktop PCs has slowed the most, Capellas said. But he added that sales of the company’s high-end servers have also been hit hard, particularly in key vertical markets such as the telecommunications and automobile industries. Orders have remained fairly strong outside the U.S., but Capellas said he remains cautious about overall demand.

NCR sues Palm, Handspring

NCR Corp. filed a lawsuit last month that could send ripples through the handheld market, as the company alleges it possesses patents to the types of devices developed by Palm Inc. and Handspring Inc.

NCR claims to hold two patents governing the creation and sale of handheld devices dating back to 1987, according to documents filed in U.S. District Court in Delaware. NCR, which is based in Dayton, Ohio, is asking the court to order Palm and Handspring to stop selling their handheld devices. Researchers from NCR developed devices for handling and transmitting data in a manner similar to that of current handheld devices such as the Palm Pilot or the Handspring Visor, the lawsuit says. NCR wanted to create a device allowing users to enter information for appointments, to-do lists, addresses and to execute shopping transactions – just like handhelds that have flooded the market since then. NCR also contends that it developed the idea of using docking stations where information could be exchanged between a handheld and other machines. Palm and Handspring should compensate NCR for damages related to past and future sales of devices that allegedly infringe on NCR patents, the lawsuit states.

Report: German army bans Microsoft software

A report in German news magazine Der Spiegel that states Germany’s military will not use Microsoft Corp. software on computers in “sensitive areas” is untrue, a Defense Ministry spokesperson has said.

“This report is wrong,” said the spokesperson. “We have a general licence contract with Microsoft, and that is remaining in force.” He added that various security measures, including firewalls, are being implemented in consultation with the German federal IT security agency BSI (Bundesamt f