Gateway to cut 1,900 jobs

As part of its plan to cut costs by more than US$400 million annually, Gateway Inc. based in Poway, Calif. plans to cut its workforce by 17 per cent- the equivalent of an estimated 1,900 employees.

To avoid being a casualty in a competitive market, the computer maker plans to make other modifications by closing 80 of its retail stores. These cutbacks came in the face of increasing competition from Dell Computer Corp. and dragging PC sales.

Gateway said it will close the unproductive Gateway Country Stores, which represent 29 per cent of the store network, on March 24.

The company estimates its first-quarter revenue for 2003 to be between US$820 million and US$850 million. Including restructuring costs, it expects to report a loss of between US$0.62 and US$0.66 per share.

Gateway hopes these adjustments will allow the company to return to a positive operating cash-flow by the year-end, and finish its fiscal year with more than US$1 billion of cash and marketable securities.

While the company has offices in Canada, there is no word yet whether cutbacks will affect Canadian employees. For information, visit