Global computer-products distributor Ingram Micro (IM) is laying off 1,000 workers, in a bid to save up to $40 million per year.
Ingram, which distributes Apple products worldwide, is blaming the softening PC market. In California, the company is to close its distribution centre in Newark, and its Santa Ana and Rancho Cucamonga returns-processing centres. Further cuts will hit its Miami distribution centre. The company has a workforce of 16,000.
IM will also reduce its product-management division from six categories to four (systems, networking and high-end storage, peripherals and software), reorganize its IT resources and restructure its US sales force.
"Through the business-process improvement initiative, which was implemented several months ago, we continue to identify ways to create a more efficient operation and capture new growth-opportunities, while maintaining the highest levels of customer service," said Guy Abramo, chief strategy and information officer. "The actions we take today will create a more competitive cost structure, making Ingram Micro even more resilient in the IT marketplace."
Larry Lapide, an analyst at AMR Research in Boston, said it was no surprise that Ingram Micro was affected by the softening demand in the IT industry.
"We're seeing a lot of layoffs in high tech, such as at Compaq and Dell, so the man in the middle gets hit, too," he said.
However, Lapide said Ingram Micro shouldn't be placed in the same category as the dot-coms that some thought would replace distributors.
Unlike the dot-coms, "Ingram Micro has made good use of the Internet to control the supply chain," he said.