Gateway Plans to Cut Expenses, Employees
Friday, February 9, 2007
Gateway announced late Thursday that it will close its retail stores next week and lay off about 2,500 employees associated with the shops, or nearly 40 percent of its work force.
The company, based in Poway, Calif., will continue its direct-sales strategy but plans to shut its 188 stores on April 9. Gateway recently acquired eMachines, and following the closing of the stores, the combined company plans to lay off 2,500--38 percent--of its 6,500 employees. Employees will receive severance packages. The company said it will provide more details about the impact of the closings on its revenue and costs when it announces its first-quarter results April 29.
The store closings were not unexpected. Analysts, who had been theorizing that the retail outlets were on the chopping block for weeks, said the stores could have been a liability for Gateway's efforts to form relationships with third-party retailers, which could carry Gateway-brand PCs and consumer electronics gear....
