Beleaguered Gateway cuts more jobs; closes Virginia manufacturing plant

“Gateway will cut at least 450 more jobs and outsource more of its PC manufacturing to third parties as it tries to streamline its distribution system and return to profitability,” John G. Spooner reports for CNET News.com. “The company on Wednesday said it will close its manufacturing plant in Hampton, Va., and work with more third parties in an effort to cut costs and improve logistics by establishing a number of local hubs for distributing and servicing its products inside and outside of the United States.”

“‘We are going to combine our own manufacturing and service capabilities with a rapidly expanding network of new and existing partners,’ Rod Sherwood, Gateway’s CFO, said at an investor conference Wednesday morning. ‘We believe this will give us a significant advantage.’ Gateway will take a charge of between $120 million and $160 million over the next few quarters to cover the plant closing, job cuts and other changes. But it expects to save between $115 million and $130 million per year as a result,” Spooner reports. “The company has cut more than 1,900 jobs and closed 80 retail stores since the beginning of this year as part of its cost-cutting efforts.”

Full article here.

10 Comments

  1. I don’t know their overall numbers, but their market share for the last quarter for notebooks was definitely lower than Apple’s according to a news post I saw earlier today.

  2. They are just moving to consumer products… PCs will be an extra product for them… Look at their stocks this past two months.. IT HAS DOUBLED. It goes up an average of 2-4% every day! Just because they are introducing new TVs, cameras, DVD devices and mp3 players. They have a lot more coming out that is not for PCs only.

  3. For those who are interested Apple outsources ALL of its product with the best selling laptops going to the same company Han Ho that manufactures Dell and IBM machines. For Gateway its’ a good move. Apple did it years ago to cut down on costs and overhead.

  4. nothing comes to mind when you say gateway, that’s the problem. they have no real outstanding products or services. they aren’t able to differentiate themselves from the competition. I mean Apple just blows the barn doors off everything gateway and the industry. They are the Sony of the 21st century, Sony is losing it’s innovative thinking that made it great in the first place.

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