The capitalism game is all about profits, and AST Research, in a year-end epiphany that its recent bottom-line troubles are not going away, announced today that it will lay off more than one-third of its 3,000-person worldwide work force.
The company, which was bought out earlier this year by South Korea's Samsung Electronics after a US$110 million fiscal first-quarter loss, will let about 1,100 workers go, cut capacity at its Fort Worth, Texas, factory, and eliminate sales branches in Australia and Southeast Asia.
Dow Jones reported that, in a recorded phone message to employees, company president S.T. Kim explained that the layoff was necessary for the company to return to profitability.
The company insisted, however, that it will not abandon any of its product lines - the firm last year was first to market with a sub-$1,000 PC - or customers.
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AT&T's Net claims: The most powerful network isn't - or at least can't claim to be - when it comes to its Internet services.
The group that oversees the advertising industry's self-regulation process ruled today that telecommunications giant AT&T must change the television and print campaign for its Web hosting services, eliminating the implication that it has the most powerful Internet network.
Industry watchdogs at the National Advertising Review Board upheld an earlier ruling by the National Advertising Division of the Council of Better Business Bureaus, which said that AT&T's claim that it has the "most powerful network in the world" could apply only to its telecommunication network, not to its Internet pipes.
The original challenge to the AT&T ads was filed by one of its chief competitors, MCI.
"AT&T disagrees with the NARB," the National Advertising Review Board said in a statement today, "but has indicated that out of respect for the advertising industry's self-regulatory process, it will modify its future advertising to account for NARB's concerns." (2.Dec.97)
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CUC's record results: Fresh from its latest acquisition binge, online retail giant CUC International announced third-quarter results today that included a 22 percent increase in revenue compared to the same quarter a year ago, to a record US$774 million.
CUC also reported a rise in quarterly net income to more than $100 million, 38 percent more than in same quarter of 1996. CUC shares closed today at 30 3/16, down 1/16 from Mondays day's close.
Until recently, CUC was best known for its member-based consumer services, including Travelers Advantage and AutoVantage. But in recent months it has purchased a number of consumer software producers, including Sierra On-Line, Davidson and Associates, and Knowledge Adventure. In May, CUC announced a merger with HFS Incorporated which is expected to close this month. HFS operates franchises in the hotel, real estate, and car rental industries, for chains which include Days Inn, Ramada, Avis, and Coldwell Banker. CUC is also a minority investor in Wired Ventures, Inc., the parent company of Wired News. (2.Dec.97)
Reuters contributed to this report.
