NEC fires 80 per cent of Packard Bell staff

PB to pull out of retail, senior bosses to go

NEC has pulled the plug on Packard Bell -- at least as a retail-oriented operation, by firing 80 per cent of the subsidiary's staff, including all of its senior management. The reason? PB entirely failed to stem its losses to the extent that backers NEC and France's Groupe Bull required. A PB spokesman, quoted in today's Wall Street Journal, said that the company was on track of post a loss of $150 million. Earlier this year, when PB announced it was laying off 200 support staff, the company said it was on track to get its losses down to $100 million -- believed to be the limit imposed by NEC. Back in July, NEC president Kouji Nishigaki threatened to "sell, merge or close" Packard Bell if the company showed no sign of a turnaround. "If things don't work out in the end, there's nothing to do but get out," he said. According to the WSJ, Packard Bell will close its Sacramento, California assembly plant and sell off the Utah-based call centre that lost 200 staff in July -- the company hopes the buyer will want to retain the centre's 600 staff, but that will still leave 1000 people out of work in Sacramento. Other facilities around the globe, with the loss of a further 1000 jobs. The company will continue with just 300-400 staff. For now, that number will include most of PB senior staff, but they are expected to quit at the end of the year. The layoffs mark NEC's decision to pull PB out of the retail PC market. Where that leaves the company now is a good question: the WSJ suggests it's looking at Internet sales. Earlier this year the company launched the Z1, an executive-oriented machine with a suitably inflated price tag to match. It's not clear how successful the Z1 has been, but it does suggest the kind of less-populated market what's left of Packard Bell can focus on. ®

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