Atari, the troubled video games and home computer company, is now expected to lay off between one-quarter and one-third of its white-collar employes, or more than 1,000 persons.
The layoffs, which had been expected for several weeks, are directly related to the company's efforts to reduce costs drastically as it girds itself to compete in the price wars that have swept the home computer marketplace.
The Warner Communications Inc. subsidiary had announced earlier that it would consolidate its home computer and video games divisions into a single group. This reorganization, which recognized that the lines between the video games console and home computer keyboard had effectively blurred, provided the company with an opportunity to reduce its work force. Top management reportedly has asked supervisors to see if they can reduce their staffs by one-third.
The company, which is based here, reported a $45.6 million loss fore the first quarter of this year, and Warner Communications Chairman Steven J. Ross indicated at the annual meeting that Atari would lose close to $50 million in the second quarter as well.
"The morale here isn't very good," said one mid-level Atari employe. "No one knows yet where this is all going to end," a senior level manager added.
However, Nolan Bushnell, the man who sold Atari to Warner and who currently has a video games licensing agreement with his old company, said "I believe the 'Black Fridays' are over."
Sources within Atari, who requested anonymity, say that the company is trying to become more technology-oriented and create products substantially different from competitors in the home computer market such as Commodore International and Texas Instruments. Atari recently announced a new family of low-cost computers at the Consumer Electronics Show. The company also is seeking exclusive arrangements with key distributors.
Sources said that Atari also is wrapping up its efforts to develop software for its machines, and this effort is considered critical to its growth over the short term.