Gateway's exit costs 19 jobs in NZ

Nineteen staff in New Zealand will lose their jobs following the closure of PC manufacturer Gateway's offices in New Zealand and Australia. Around 200 people in Australia will also be made redundant.

Nineteen staff in New Zealand will lose their jobs following the closure of PC manufacturer Gateway's offices in New Zealand and Australia. Around 200 people in Australia will also be made redundant.

Gateway is abandoning the entire region, with closures in Singapore, Hong Kong and Malaysia as well as Japan and Australasia.

"The Asia Pacific regional closure announcement is among several market withdrawals being announced internationally by Gateway," says a local company release, which hints at Gateway's proposed re-evaluation of its position outside North America. European operations are expected to be axed in the next month, although Gateway insists it is simply reviewing operations at this stage.

The company announced its closure to staff last week, offering "a package of severance benefits which in every case exceeds the legal requirements" and includes help from an "outplacement organisation", according to the release. "All employees including all regional managers are impacted," the release says.

Warranty support for existing customers will continue but anyone who has bought a machine from the company and not yet received it will instead be offered a refund. "Customers who ordered in the last 14 days will be eligible for a full refund and we will be contacting them to ask them whether they want to proceed with their order."

The move sees the layoff of around 25% of the company's workforce and is supposed to "bring it back to profitability" by the end of the financial year. The cost of the closure is expected to be around $US475 million, which includes $US200 million to extract itself from Europe. The move is expected to save the company around $US300 million a year.

The US end of the operation doesn't miss out on the pain either. Around 15% of the company's US workforce will be laid off, including four call centres and the Salt Lake City manufacturing facility, which joins the Malaysian plant on the scrapheap.

In New Zealand Gateway had a marketshare of only 2%, according to research company IDC's latest figures.

Gateway New Zealand began operation with the purchase of PC Direct in 1998 for an estimated $7 million. Since then the operation has been downsized repeatedly and Gateway has slipped in the ratings. PC Direct peaked in 1996 at third overall PC sales in IDC's survey _ Gateway ranked seventh last year and was 10th this year.

Attempts to contact the company directly last week were unsuccessful.

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