Politic-Economic-Society-Tech
Many lose jobs as Gateway exits Asia
Japan, Malaysia hit hard by firm's pull-out from region
KUALA LUMPUR US personal computer maker Gateway Inc's exit from Asia will cost the region about 1345 jobs, with Japan and Malaysia bearing the brunt.
The company, which announced on Tuesday it is laying off 25% of its global workforce of about 19000, said it was closing down operations in Australia, Japan, Malaysia, New Zealand and Singapore.
The grim news was broken to Gateway's Asia employees yesterday morning, with the US market's fourth-biggest PC company issuing statements in its various Asian centres.
In all, Gateway said about 400 employees would be affected in Malaysia, 28 in Singapore, 698 in Japan, 200 in Australia and 19 in New Zealand.
But Gateway, known for its black-and-white boxes spotted like cow hides, said support, warranty and parts services would continue in Asia.
Gateway had been banking on growth in the Asia-Pacific consumer market, which formed about 5% of its global revenues at the end of December 2000, to help buffer earnings against the slowdown in US demand.
But the company has been hit hard by a PC price war with rivals Dell Computer Corporation, Compaq Computer Corporation and Hewlett-Packard.
Gateway's news is the latest in a spate of job cutbacks by technology and electronic companies in Asia and elsewhere.
Hitachi, Japan's largest electronics manufacturer, is compiling a restructuring plan that will call for trimming 20000 jobs, or 6% of its group-wide workforce.
Hitachi already announced last month that it would stop cathode ray tubes for personal computer displays and close plants in Singapore and Malaysia that employ 2600 people. On Monday, Toshiba Corp, the world's second-largest chip manufacturer, said it would cut 18800 jobs, or 10% of its global workforce by March 2004 in a bid to bolster profitability in the wake of the electronics slump.
The industry slump has shaved about 20% or more in the share prices of most Japanese semiconductor and electronics conglomerates since January.
For Gateway, the pull-out from Asia will be swift. It said most of the employees in its Asian centres would leave the company within the next few days. It said it will cut a total of 4600 of its global workforce, take a $475m thirdquarter charge and could exit European operations as well.
Gateway said it had closed all 18 Gateway stores throughout Australia and New Zealand, its manufacturing plant in Malaysia and its regional office in Singapore. It had also closed all 18 stores that it directly operated in Japan.
The PC manufacturer also said it was cutting about 15% of its US labour force and would close call centres in Hampton, Virginia; Vermillion, South Dakota; Salt Lake City, Utah; and Lake Forest, California. Reuters.
source: Business Day, Aug. 30, 2001,
