Gateway to Cut 2,250 Jobs, Shut 19 Stores
Gateway Inc. announced Thursday that it was cutting about 2,250 jobs and closing 19 of its retail stores in a new reorganization.
The No. 4 U.S. personal computer maker also reported a fourth-quarter operating profit in line with an early statement, adding that its sales slid.
A spokeswoman said Gateway was cutting 2,250 of 14,000 jobs, 4 of its 10 administrative and support sites and 19 of its 296 "Country Store" showrooms.
The new cuts affect about 16 percent of jobs and come on top of a 25 percent cut in the work force announced last year, when Gateway said it was shuttering foreign operations.
"We believe that there are no other restructuring activities on the horizon for 2002," Chief Financial Officer Joe Burke said.
Gateway, which was downgraded to junk status by Moody's Investors Service after it announced revenue would miss Wall Street expectations, said it earned $5.1 million or 2 cents per diluted share before one-time items, compared with a loss of $128 million or 40 cents per share in the year-ago quarter.
Including all charges and extraordinary gains, Gateway posted a profit of $9.4 million or 3 cents per share.
Sales slowed to $1.1 billion from $2.4 billion, hit by slow low-end computer sales as well as restructuring last year, when Gateway closed international operations to focus on the United States.
Gateway said on Jan. 7 that it would make a profit, instead of the 1-cent loss, before one-time charges, expected at the time by Wall Street, and that sales would be $1.16 billion, below the $1.39 billion that tracking firm Thomson Financial/First Call reported as the Wall Street consensus forecast.
Reuters contributed to this report.