DIGITAL Equipment Corp's Asian operation is unlikely to be seriously affected by the United States multinational's cost-cutting drive, according to a Hong Kong-based spokesman. Last week, the group announced a US$1.75 billion loss for the fourth quarter. The bulk of the loss - US$1.2 billion - was in the form of a charge for layoffs and other cuts, including a sharp reduction in Digital's space to 10 million square feet from 22 million. Digital said it would cut a further 20,000 staff from its workforce, leaving it with 65,000 employees - down from a mid-1991 peak of 137,000. This and the space cut would save about US$1.85 billion per year, the company said. ''It is our policy not to break down the numbers but we had a very good year in Asia,'' Jon Rittger, Digital's director of communications, Asia and Pacific, said. He said it was unlikely that any staff would be shed from the Asian operation. ''The Asian operation has always been run by a fairly lean team and with the new growth we have been enjoying, I can't see any major affect here.'' The Massachusetts-based group's losses in the past four years total about US$4 billion. This was a period of strong competition and refocusing for all major computer companies. But Digital aggravated the situation by becoming deeply involved in basic software development. It also lost potential corporate customers because it was often unable to provide them with integrating packages using equipment and software they had already bought, insisting instead they bought new systems. This experience led to the Open Server philosophy now adopted by the firm. In late 1992, realising the severity of the group's situation, the Digital board ousted its founder Ken Olsen and appointed Robert Palmer as chief executive. It has since undergone a radical cost-cutting exercise, focusing its energy on developing its core businesses of software (in collaboration with specialists including Microsoft), systems, networks and services. ''Obviously, we have to be in the PC business, but we have to continue to focus on marketing workstations and networks,'' Mr Rittger said. ''Obviously, there will be a changed focus as we concentrate on core competencies. We may have to move people around and we will focus more closely than ever on developing partners and channels.'' Digital's Asia operation, excluding Japan and Australia, employs about 3,000 staff. According to Mr Rittger, Asia including Japan and Australia employs about 4,400 (6.8 per cent) of the worldwide total of 65,000, while accounting for about 14 per cent of global revenue. Mr Rittger said Digital's PC sales were up by 275 per cent in Asia in the last fiscal year. The group is forecasting a one million annual production run rate of PCs worldwide by the end of the year.