Gateway will Cut Costs, Take Restructuring Charge
Gateway Computer has reported losses in eight of its previous nine quarters, and its most recent Q4 loss was $72 million. This compares to net income of $9.4 million for the same period one year ago. Gateway has announced that it will take an $80 million restructuring charge and cut costs to become profitable once again. The weak computer sales market, tough competition and jitters over the economy in general have all impacted Gateway's performance. The company plans to cut its overhead and administrative expenses to below $200 million by the fourth quarter by closing unprofitable retail stores, eliminating jobs, cutting warranty and component replacement costs. Gateway management said it would have more announcements before the end of this month.