|  | 	Being a relatively long time Deccie, I have noticed that
	whenever Ken is asked that question, he has responded 
	in about the same fashion. He will NEVER say no lay offs.
	I dont think it will happen unless it gets really bad.
	Anyone who has been around here has seen hiring and salary
	freezes, major reorgs etc. However, One still gets the
	jitters wondering will THIS be the time?
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|  | 
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	|d|i|g|i|t|a|l|       I N T E R O F F I C E   M E M O R A N D U M
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	TO: U.S. Employees		DATE:   19 May 1989
	                                FROM: 	Executive Committee
                                                      
	SUBJ:  SALARY DELAY
	     (This message is to be communicated to every US Employee)
	During the last several quarters, revenues were less than
	anticipated.  The U.S., in particular, saw demand fall below
	expectations while business remains strong in Europe and GIA.
	Steps have been taken to control costs by eliminating unnecessary
	spending and limiting hiring to only critical positions.
	As an additional step in the U.S., we also see the need to delay
	the FY90 U.S. Pay Program for all employees beginning in Q1.
	The situation will be reviewed at the end of Q1 to see if a 
	continuation of the delay is warranted.  It is, of course, our
	hope that business conditions will allow implementation of the
	pay program.
	This action will be reviewed on a country by country basis to
	determine whether similar steps are necessary.
	We appreciate your continued efforts and support as we address the
	current situation.  We also encourage you to continue your efforts
	to reduce and eliminate expenses in your cost center.
	We have the best people, the best products and magnificent 
	technology.  Our challenge now is to concentrate the efforts and
	assets of the entire corporation so that our customers have a
	clear understanding of our ability to satisfy their needs.
	COMMUNICATION PROCESS
	---------------------
	Thursday, May 18th
	------------------
	At  9:00 a.m.	You should begin communicating appropriate messages
			to your direct reports.
	By 11:00 a.m.	Your direct reports hold meetings or telephone
			conferences with managers who report to them and
			communicate the messages.
	Friday, May 19th
	----------------
	At  4:00 pm	Employee Communications puts up on LIVE WIRE the 
			salary communique.  A "pointer" will be placed on
			the Digital notesfile to "point" employees to 
			LIVE WIRE for information.
			Public Relations and Investor Relations will have
			statements to release to the media and financial 
			community.
		
	QUESTIONS AND ANSWERS:  RE:  THE SALARY INCREASE DELAY
	---------------------
	 1.  Is this worldwide?
	     The delay is being implemented in the U.S., where the 
	     revenue shortfall is most acute.  However, this action will be
	     reviewed on a country-by-country basis to determine whether
	     similar steps are necessary.
	 2.  Does this affect both exempt and nonexempt employees?
	     Yes, it affects all U.S. Digital employees.
	 3.  Will implementation of JEC in the U.S. be affected by this 
	     action?
	     No.  JEC will occur as planned, effective July 2, the first day
	     of the new fiscal year.  All managers should communicate these
	     classifications to employees by July 1.
	 4.  Will supervisors have new salary ranges to show employees when
	     communicating JEC job codes?
	     Yes.  Supervisors will have access to a revised FY90 structure,
	     which will remain in effect for the duration of the delay.  A
	     review of the FY90 structure will be conducted before the 
	     resumption of the pay program to determine if updates should 
	     occur.
	 5.  What if employees are below minimum or over maximum of their
	     new salary ranges when JEC is implemented on July 1?
	     In both situations, the current policies will apply at the end of
	     the delay when the new program commences.  Refer to the 
	     SALARY MANAGEMENT binder, Section 5, for more details concerning 
	     these policies.
	 6.  What will be the status of the remaining salary increases planned
	     for FY89?
	     The FY89 program should proceed as planned.  Senior management's
	     expectation is that there should be NO OVERSPENDING or overall
	     decrease in frequency from the approved FY89 plan.
	 7.  Should promotions continue during this delay?  If so, will there
	     be money to go along with them?  If the money is not available
	     during the delay, will a raise be retroactive once the delay is
	     over?
	     Promotions should continue as required by the business, but there
	     will be no money available to fund increases.  If an employee is
	     promoted and is below the minimum of the range, the current
	     policy of bringing the employee to the minimum of the range 
	     within three months will apply when the new pay program commences.
	     There will be no retroactive raises.  Also, the number of 
	     promotions and overall movement in the average salary range
	     indicators will be monitored during the delay period.
	 8.  Should performance reviews continue during this period?  If so,
	     how will they be used?
	     Yes.  Employees' performance reviews should continue during this
	     period.  Following policy, an employee's job performance should
	     be reviewed annually.  Performance ratings should be entered
	     onto the Employee Master File.  These may be used as the most
	     recent ratings when Salary Planning begins.
	 9.  What happens if an employee's job changes significantly due to
	     business changes or reorganization during the delay?
	     If an employee's job changes significantly at any time, he or
	     she may need to be re-classified.  During this salary increase
	     delay, as well as afterwards, employees should be classified 
	     correctly according to the work being performed.
	10.  Will an employee's salary review date change permanently?
	     Yes.  Every employee's salary review date will advance according
	     to the length of the salary increase delay.  In addition, the
	     timing of an increase also may be extended further based on the
	     employee's performance and position in the salary range.  
	     Please refer to the SALARY MANAGEMENT binder, Section 5,
	     for more details on timing of increases.
	11.  When will increases begin again?
	     The situation will be monitored by senior management and reviewed
	     at the end of Q1 to see if a continuation of the delay is 
	     warranted.  When the decision is made to end the delay, Salary
	     Planning will begin.  Employee salary increases will be granted
	     once the overall salary plan has been approved.
	12.  In the future, will the amount available for salary increases
	     across the company be linked to the company's performance?
	     The development of a salary increase budget is linked to several
	     factors.  While we strive to pay compeititively, equitably, and
	     for performance, we also have to look at another influencing 
	     factor -- affordability.  Company performance will always be a
	     consideration in what we can afford to deliver in salary increases.
 | 
|  |     When I worked for a non-profit agency a few years ago, I had to
    investigate the subject of unemployment contributions in Mass.  What's
    true for a small non-profit may be different than what's true for a
    large corporation, but at the time employers could choose one of two
    methods for contributions. 
    
    They could make regular contributions into the system according to a
    state formula based on numbers of employees (etc), or they could take
    a risk and make no contributions unless employees actually came
    forward to collect, at which point they would be required to bear a
    significantly larger amount of the burden than they would otherwise. 
                                            
    Holly
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