Gateway to Shut Four Call Centers in Downsizing

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Gateway Inc. will close four call centers in the United States as part of the computer maker's $300 million reduction in annual operating costs announced this week.


The four call centers are in Hampton, VA; Vermillion, SD; Salt Lake City; and Lake Forest, CA. The facilities will close as Gateway slashes its U.S. workforce of 16,500 by 15 percent.


The exact number of workers who will be cut as a result of the call center closings was not disclosed; however, the closing of the Hampton facility alone led to 575 job cuts, according to local media reports.


The company said it would consolidate its sales, service and support capabilities into its remaining call centers, which will be reorganized to focus on specific U.S. regions. The move is in keeping with Gateway's shift toward focus of local markets and on fully using the company's network of retail stores for sales and service.


Gateway will continue to operate call centers in: Sioux Falls, SD; North Sioux City, SD; Kansas City, MO; Rio Rancho, NM; Colorado Springs, CO.


"What we're going to do is better utilize the physical assets we have in the current markets," said Ted Waitt, chairman and CEO of Gateway. Waitt said the cuts would make Gateway a "much nimbler, faster, better company."


Gateway is exiting all markets in the Asia/Pacific region, including Malaysia, Singapore, Japan, Australia and New Zealand. A total of 2,500 overseas Gateway employees will be cut as the result of the company leaving the markets.


"Outside the U.S., we don't have the brand awareness, we don't have the distribution capability," Waitt said. "We're primarily a hardware supplier. The partnerships are much more difficult and much more varied."


The cutbacks, which will cost Gateway a one-time $475 million charge in third-quarter of this year, will lead to fourth-quarter profitability for the company, Waitt said.


Gateway reported a net loss of $20.8 million in the second quarter of this year, and unit sales were down 21 percent for the quarter. The reported loss came on the heels of analyst downgrades of Gateway stock and reports from research firm Gartner Dataquest that PC shipments in the second quarter dipped to 30.4 million, down 1.9 percent from the same period last year.


Gateway said it expects domestic unit volume to be on the increase during the third and fourth quarters of this year.


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