Gateway retreat is confirmed

As widely expected, Gateway today confirmed that it is to close all its overseas manufacturing and distribution to concentrate solely on the US market.

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By  Guy Mathew Published  September 10, 2001

Gateway retreat is confirmed

Gateway has confirmed today that it is to pull out of Southern Eastern Europe, the Middle East and Africa. The move had been expected by industry observers since the company’s decision to close its manufacturing base in Ireland and pull out of Western Europe. The company will now focus solely on US operations.

The decision was announced at the same time as the company revealed that it had completed negotiations with union representatives in the UK and Ireland agreeing redundancies. Operations will be wrapped up by the end of this year.

Martin Coles, Gateway’s senior vice-president, said: “We’re accelerating our strategy to deliver personalised technology solutions for our target customers, so we’ve had to make market-by-market decisions about where we can achieve these goals most effectively.”

The total loss of jobs will amount to some 2400 wordwide, most of which will be in Western Europe. Gateway also ceased operations in Asia Pacfic last month. Coles added: “We empathise with employee’s concerns, but at this time we must make such difficult changes to ensure future growth and profitability for the entire company.”

Sophie Michaelides, PR manager for Gateway SEEMEA, was anxious to point out the departure did not mean the abandonment of customers in the Middle East. She said: “We will fulfill the orders we have so far although we take no new orders from today. We will definitely continue to provide service and product support as long as we need to.”

But some partners were still surprised that there was to be a total withdrawal from the Middle East market. Yazd Goiporia, of Computer Direct Access, the online reseller based in Dubai, said: “We didn’t think they would pull out of this region, we thought it would just be Asia.” Although Goiporia only started selling Gateway this year, and as such is not over-dependent on their sales, he added: “It is not an overwhelming worry – but definitely a concern.”

Now that Gateway has restricted itself to the US market the company hopes to make substantial savings from next year. However in a report from ABN AMRO investment bank published last Wednesday, analysts questioned the strategy. Robert Cihra, author of the report said: “It seems Gateway has now formally marginalised its position in the overall PC market. We believe that Gateway will now be solely dependent on the world’s most mature PC market, the USA, and no longer have a chance to benefit from lower penetration rates overseas.”

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