Gateway lays off 250; shuts HK, M'sia operations

PC maker Gateway Inc has pulled the plug on its Malaysian and Hong Kong operations following massive cost cutting and restructuring across the Asia Pacific region.

SINGAPORE--PC maker Gateway Inc has pulled the plug on its Malaysian and Hong Kong operations following massive cost cutting and restructuring across the Asia Pacific region.

In January this year, Gateway Asia Pacific--which comprises Singapore, Hong Kong and Malaysia--employed about 670 staff, including more than 400 at its manufacturing facility in Malacca, Malaysia.

Over the last six months, about 240 to 250 Gateway employees have received pink slips. These include all 70 from its Malaysian sales office and the remainder from Singapore and Hong Kong, a Gateway Asia spokesperson said.

She declined to provide specifics but said that its Malacca plant was unscathed by the downsizing exercise. In the Republic, Gateway has more than 20 employees, she added. No further details were provided on Hong Kong, other than that the office was closed on June 30.

"Gateway is moving towards a new business model...we will focus on brand management and product management while our partners will handle sales and marketing, as well as customer service,'' the spokesperson said.

Several key management positions have also been left vacant following departures from high-level executives. In Singapore, for instance, IT veteran Graham Long, who used to head Gateway's Asia Pacific operations, has "retired" while its human resources head Ron Chan will be leaving the company, she confirmed.

Long's post has been filled by Peter Quinlan, who has served the company for four years in various positions including business development, sales and marketing.

"Most of the company's senior management has left...we don't need a weighty senior management given our new business model," the spokesperson said.

In Kuala Lumpur, Gateway has closed two Country Stores and will outsource call center services and pre-delivery support to Datacom, while Unisys will handle both repair and onsite technical support. Based in Malaysia, both DataCom and Unisys will service Gateway customers in Singapore, Malaysia and Hong Kong.

Gateway also plans to shutter two out of four outlets in Hong Kong. "The remaining stores in Hong Kong will be managed by a business partner," she added, declining to dislose its identity.

The company will maintain its store at Funan the IT Mall here, she said. This store will be managed by a yet-to-be identified partner.

Gateway also operates store-in-store outlets in many countries. In Singapore, it was in partnership with telecommunications company StarHub Pte Ltd, operating two such outlets here. However, this has ceased as the contractual period has ended, explained StarHub spokesperson Robin Tan.

"We needed to use the space to showcase our own products and solutions," Tan said. He declined to reveal financial details behind the StarHub-Gateway partnership.

In April, the PC maker reported a pre-tax operating loss of US$6 million, or a penny per share after taxes, excluding special charges on first-quarter revenue of US$2.03 billion.

Earlier in January, Gateway said it would cut at least 3,000 jobs--more than 10 percent of its work force.