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eMachines, the bottom-scraping budget PC maker, is sacking 16 per cent of its staff, to get expenses into line with falling sales.

To add insult upon injury, eMachines's idea to flog ads that customers would see when they logged on has turned out to be a bummer.

The company's got to make some money somehow, but who ever thought of Ekeys? These buttons on the Emachines keyboard link directly to Web sites. How vulgar and intrusive.

eMachines is now to close down its Internet business with the loss of 21 jobs.

The company is to take a restructuring charge of $3.7m in Q1 and is shutting offices in San Francisco and New York. The cutbacks should save it $2.8m a year, at the cost of $1.2m in lower revenues.

eMachines, Korean-owned but based in America, sells PCs as cheap as they come, and it built huge market share in 1999 through deals with MSN among others which saw customers receive PCs as part of bundled ISP contracts. Since the end of those deals sales have fallen by half.

In October 2000, the company announced plans to cut PC manufacture by 20 per cent, in advance of the Christmas season. In retrospect, that was probably the wisest call on the market of any US PC maker - even though the move was prompted more by financial exigencies than by an ability to read a crystal ball.

eMachines last year awarded exclusive European representation rights to Dixons Stores Group, and solus retail rights in countries where the electronics retail giant operated. But there's no data on how that's getting along. ®

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eMachines slashes PC production
eMachines turns up in Europe with Dixons

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