Feeds

Jobs to go as CHS sees poor results

Weak Q4 and full year blamed on vendor rebate problems

  • alert
  • submit to reddit

High performance access to file storage

Broadline distributor CHS Electronics will cut staff by 10 per cent and shut offices worldwide in a $15 million cost-cutting plan after posting a drop in profit in 1998. The US channel giant has outlined a huge overhaul to slash costs, including halting employee recruitment and trimming current staffing levels by about 600. It will also merge its 10 world regions into six operations and look at axing 25 to 30 redundant local warehouses. Q4 profit stood at $13 million on $2.9 billion turnover. This was compared to $23.8 million profit in the previous year, according to reports by Reuters. According to Peter Rigby, CHS director of marketing and communications, his will include merging the six UK warehouses into one building in Banbury, which was bought last month. CHS blamed overstated vendor rebates in the second, third and fourth quarters for the poor results. It was a similar story for the year-end results, with profit at $45.7 million, on turnover of $8.5 billion. This was against $48.4 million net income, in 1997. Rigby was unable to confirm how many, if any, jobs would be lost in the UK. He said: "A lot depends on how each of the companies are run and their profit. In a company like ours, there are always parts of it that perform and parts that don’t." He added that many of the jobs would go in "natural wastage" following the freeze on recruitment. CHS has 500 employees in the UK, and around 6,000 to 7,000 worldwide. Several top executive changes have been made recently. Pasquale Giordano, former executive VP of Europe, resigned following an investigation into the rebate discrepancies by an outside solicitor. This investigation also led to the restating of the second and third quarter’s results. He has been replaced by Jean-Pierre Robinot as CCO of Europe, who joined from Seagate. Senior executive Burt Emmer will oversee and take responsibility for vendor rebates. Chief executive Claudio Orsio will come out of his back-seat role of running CHS at a strategic level and resume direct responsibility for the overall business. The plan aims to reduce capital expenditures in 1999 by $15 million, cut operating expenses by $40 million and push up cash flow by $50 million. ®

Top three mobile application threats

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Number crunching suggests Yahoo! US is worth less than nothing
China and Japan holdings worth more than entire company
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.