Uncertainty surrounding the future of Digital's Galway operation was lifted when Compaq - which bought Digital in January for $9.6 billion (£6.87 billion) - announced its international restructuring plans. The 500 jobs in Galway will not be affected by the international cutbacks, reflecting the importance of the operation for Digital in Europe.

Digital's Galway operation, serves Europe, the Middle East and Africa and there had been some fears that the cutbacks could affect the plant. One senior Digital source said: "The Compaq UK/Ireland management team could have been insensitive to how important Ireland is. But the Irish operation has a concentration of high value-add people contributing to the European business, while their contribution to the Irish business is less."

The Galway manufacturing base will now become part of Compaq's services organisation for software development, software publishing and marketing support.

There has been no announcement made on the future of Digital's Dublin operation, where 850 people are employed in sales and call centre services. However it is almost entirely comprised of "customer facing" staff, who Compaq chief executive officer Mr Eckhard Pfeiffer said would not be affected when he announced plans to cut about 15,000 jobs across the two companies earlier this month.

Under yesterday's announcement, over 500 jobs will be lost in Scotland by the end of the year through the merger of the plants and processes of Tandem, Digital and Compaq.