Low-cost direct-sales PC manufacturer Gateway is sacking 17 per cent of its 11,200 staff and closing 76 of its US retail outlets.
The cuts are part of a restructuring effort designed to "return the company to profitability". The company expects the restructuring to cost between $75-$80 million, which will reflect in its first-quarter 2003 earnings.
Gateway estimates that its first-quarter revenue for 2003 will be between $820 million and $850 million. Including the restructuring costs, it expects to report a loss of between $0.62 and $0.66 per share.
Following the jobs cull the company will have 192 Gateway stores across the US ? it had 326 such outlets at its peak. The company expects to complete the closures by March 24.
Gateway CEO Ted Waitt said: "There's going to be a lot of effort in terms of repositioning our retail stores. We're going to invest - we are committed to our retail sales channel - but we have to do some work."