The model developed in this article explains differences in the division of labour across firms as a result of computer technology adoption. Changes in the division of labour result from reduced production time and improved communication possibilities. The first shifts the division of labour towards generic structures, while the latter enhances specialisation. Our estimates for a sample of Dutch establishments in the period 1990-6 suggest that productivity gains have been the main determinant for shifts in the division of labour. These productivity gains induced skill upgrading, while in firms gaining from improved communication possibilities specialisation increased and skill requirements have fallen.