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Gateway to Lay Off Quarter of Global Workforce
Gateway, the nation's No. 4 manufacturer of personal computers, said Tuesday it is laying off about 5,000 employees ¡ª around one-quarter of its global work force ¡ª because of an increasingly bleak market.
The company said it now expects to return to profitability in the fourth quarter. Previously, officials said they did not expect that to happen until fiscal 2002.
"As tough as these decisions were to make, we're doing all the right things to create a new company with a unique competitive edge and a healthy, profitable future," said Ted Waitt, Gateway's founder, chairman and CEO. "We're planning to win by building a lean, nimble organization that is unified and focused on our customer base unlike any other time in our history."
About 15% of the company's U.S. work force will be cut under the plan, which the company said will help it save $300 million annually. The layoffs follow an earlier wave of job cuts and a management shake-up which brought Waitt back to the company's helm after a brief retirement. Gateway cut about 3,000 employees in January.
The cuts will leave Gateway with about 19,000 workers worldwide.
Gateway will immediately close all of its company-owned operations in Malaysia, Singapore, Japan, Australia and New Zealand. The company also will close customer service and sales centers in Hampton, Va.; Vermillion, S.D.; Salt Lake City; and Lake Forest.
In an interview with The Associated Press, Waitt said the layoffs are part of the company's strategy to diversify its product line and return to profitability by the fourth quarter of fiscal 2001.
The PC industry saw its first-ever drop in sales this year. Some analysts predict it won't recover until next year or early 2003.
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