Japan's NEC Corp. plans a restructuring of its U.S. Packard Bell NEC unit that will result in layoffs of about 80 percent of the unit's staff, the departure of senior management and its withdrawal from the U.S. retail personal-computer market, according to published reports Wednesday.
According to Packard Bell spokesman Ron Fuchs, NEC, together with French partner Groupe Bull, which holds 12 percent of the unit, had wanted Packard Bell NEC to post a loss of no more than $100 million in 1999, but the unit is on track for a loss of $150 million this year.
Reports state that Packard Bell will close its Sacramento, Calif., manufacturing facility, resulting in a loss of 1,000 jobs. It is also in talks to sell its call center in Magna, Utah, and expects the 600 workers there to be transferred to the new owner, and the unit will cut administrative staff by several hundred.
All told, Packard Bell will shrink by 2,600 employees to 300 to 400, according to reports.
Alain Couder, a former Bull executive who headed the unit for the past year and a half, will step down at the end of the year, as will 12 of the unit's 13 most senior executives, reports said.
Finally, the unit will withdraw from the U.S. retail PC market entirely, although it will explore options for selling consumer-oriented PCs over the Internet.