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Gateway waves goodbye to another 2,000

Life by a thousand cuts?

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Gateway is to pink-slip 2,000 staffers, in the wake of its takeover of eMachines. This will reduce headcount to c.5,500 within a few months.

Roderick Sherwood, CFO at the PC maker, dropped the bombshell yesterday in a presentation at the Morgan Stanley Semiconductor & Systems Conference. We trust the staff were informed first...

Gateway announced its intention in January to buy eMachines for $235m in cash and stock. eMachines will give Gateway a budget PC line to flog in the US and, through Dixons Stores Group, in Europe. The enlarged group will be the third biggest PC maker in the US and the seventh biggest in the world.

This will mark a return to growth for Gateway, albeit achieved only by acquisition. The company has been rowing backwards on revenues and staff numbers for years, fleeing Europe and Asia to concentrate on its American heartland.

But even now, it doesn't appear to have regained the knack of making money: it lost $114m in its last financial quarter. ®

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