Gateway Inc., the world's second largest direct seller of PCs, is likely to close its Irish operations with the loss of 900 jobs. Chairman and Chief Executive Ted Waitt yesterday said that the beleaguered firm is considering pulling out of European and Asian markets, reducing its in-house manufacturing and eliminating custom personal-computer options for consumers in a restructuring aimed at returning to profitability.
Exiting those markets, which generated $1.36 billion in sales last year,
could result in eliminating 2,500 overseas workers. "We will have
less people six months from today than we do now," Mr. Waitt said.
The company has already dismissed 3,000 workers this year, and its market
share in the United States, its traditional strength, declined in the
second quarter to 7.4 percent from 8.3 percent a year earlier.
The company said that it had begun the consultative process that is required by EU law before making a final decision to shut down operations. The facilities under review include a manufacturing plant in Dublin as well as a sales and marketing operation in Uxbridge, West London, employing a total of 1,000 people.
The company said it would have been profitable in the second quarter if not for losses incurred at non-US operations, which account for only 14% of its total sales volume. A spokesman would not speculate on the scale of Gateway's retrenchment but did not rule out a complete withdrawal from non-US markets.
Gateway has suffered three consecutive quarterly losses and sales have fallen as depressed PC demand has sparked a fierce price-cutting war among leading suppliers. The company has said it would focus more on services to offset the slump in PC sales.
After the news broke yesterday, Fine Gael's Richard Bruton called on the Irish Government to carry out risk assessments on all IT firms in Ireland. Mr Bruton said the Government must now work to prevent further closures because of the downturn in the global economy. An estimated 72,000 people are employed in the Irish technology sector.
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