Acer writes off $150m as audit finds 'abnormalities'
EMEA warehouses bulging with kit
Acer CEO and Chairman JT Wang has relinquished his remuneration package including bonuses from 2010 after the firm unearthed "abnormalities" in channel inventory across EMEA that will cost it US $150m (£91m) to write off.
The Taiwanese giant will also cut board directors' pay packages by 50 per cent, ask staff to take a 40 per cent cut in bonuses accrued last year and plans to axe 300 jobs in EMEA .
Following the departure of previous CEO Gianfranco Lanci, Acer undertook an internal audit of EMEA operations which highlighted the issues.
"[We] discovered abnormalities in terms of channel inventory stored in freight forwarders' warehouses, and in the accounts receivables from channels in Spain," the firm said in a statement today.
The issues were related to the management of stock and as a result, directors are recommending to the board to "provide a sales allowance" and work with partners to find a solution, "resulting in US $150m write-off in operation loss".
The vendor said Wang was "regretful of the current situation and will dedicate his efforts to fully investigating the reasons behind the loss and to improving internal management".
On top of Wang's gesture, the board has committed to cut pay packages in half, and at its next shareholders' meeting will propose to reduce staffers' bonuses for 2010 from NT $1.5bn to NT $900m, or by 40 per cent.
The knife will also be taken to the already lean EMEA workforce, with around 300 roles to be cut to counter the general PC market slowdown, as consumers either stay at home or opt for tablet PCs, particularly Apple's iPad.
Acer's meteoric rise in the past decade was on the back of low-cost mobile PCs, stacked high in the channel.
Many distribution partners have complained about Acer's channel-stuffing policies and the pressure it placed on their businesses; perhaps this debacle will finally hammer the final nail into that business model. ®