Gateway Making New U.S. Layoffs, Closing Stores

Printer-friendly version Email this CRN article

PC maker Gateway, facing slowing sales, said Thursday it would make a new round of job cuts and close some retail outlets.

The No. 4 U.S. computer maker, which announced earlier this month that fourth-quarter sales had fallen shy of Wall Street expectations, will give further details when it announces fourth-quarter results later in the day, according to a spokeswoman.

"Yes we can confirm that there will be employee reductions, and at this time we are taking actions to communicate those steps with our employees," she says, adding that Gateway is closing some of its "Country Store" showrooms.

The job cuts are in addition to the 25-percent reduction that Poway, Calif.-based Gateway announced last year as it cut its international operations to focus on U.S. sales. Those affected about 4,600 employees.

The spokeswoman declined to say how many employees or stores would be affected by the new round of cuts.

Gateway said on Jan. 7 that it would make a fourth-quarter profit, instead of the 1 cent loss, before one-time charges, expected at the time by Wall Street, but that sales would be$1.16 billion, below the $1.39 billion that tracking firm Thomson Financial/First Call reported as the average Wall Street forecast.

Many analysts took that projected revenue as an indication Gateway was losing market share.

Gateway shares closed off 3.64 percent at $6.36 on the New York Stock Exchange on Thursday.

Copyright 2000 Reuters Limited. All rights reserved.

Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters.

Reuters shall be not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Printer-friendly version Email this CRN article