Computer Distributor Ingram Cuts 1,000 Jobs
Ingram Micro Inc., the world’s largest distributor of computer products, said Wednesday that it will cut 1,000 U.S. jobs, or about 6% of its work force, because of weak demand for computers and networking equipment.
The company said it expects to save $30 million to $40 million a year as a result of the cuts, closing three facilities that will reduce its presence significantly in California. Ingram Micro already has eliminated 1,000 U.S. jobs since the beginning of the year.
When all the job cuts and other changes are complete, Ingram Micro’s operations in the state will be reduced to its headquarters in Santa Ana and a large distribution center in Mira Loma in Riverside County.
“We took aggressive action based on our analysis of . . . the market,” said Kevin Murai, president of Ingram Micro U.S.
Ingram and other wholesale distributors have been reeling from the overall technology slump, posting lower sales and profits and warning that things could worsen.
Indeed, U.S. personal computer sales are expected to fall 6.3% this year, the first annual decline, market research firm International Data Corp. said Wednesday.
Ingram Micro saw its first-quarter sales drop 7.7% to $7.2 billion. Last month, the company warned that second-quarter sales could fall as much as 13% below sales a year ago.
Ingram Micro sells more than 280,000 products from suppliers including Seagate Technology Inc., Compaq Computer Corp., Corel Corp. and Cisco Systems Inc. It has about 175,000 customers worldwide.
The outlook is equally gloomy for Ingram’s top rival, Tech Data Corp. of Clearwater, Fla., which said last week that second-quarter sales will be off as much as 18%.
“The word ‘slowdown’ for the industry is generous,” said analyst Robert Anastasi of investment firm Raymond James. “It’s a near-depression.”
Ingram is eliminating 430 positions at its 2,700-employee headquarters, where grim workers hauled out personal possessions after receiving the news Wednesday morning. It also plans to shutter facilities in Santa Ana and Rancho Cucamonga that process returned products, severing about 250 positions.
A 250-employee distribution center is being closed in Newark, Calif. Elsewhere, the company plans to cut 220 jobs at facilities in Buffalo, N.Y., and Miami.
A large warehouse with 430 employees in Fullerton will remain open, although Ingram said previously that it plans to move those distribution operations next year to the 800,000-square-foot facility in Mira Loma.
The returned-products operations will be consolidated into a new automated facility in Harrisburg, Pa., the company said.
Ingram Micro shares fell 9 cents to $13.49 Wednesday on the New York Stock Exchange.
Before the latest cuts, the company had 16,500 employees worldwide, including 2,900 in this region. In April, the company said it was eliminating 470 jobs.
The company said it expects to take a second-quarter charge of as much as $15 million from the cuts.
Steve Quinones, a 39-year-old information-technology project manager, said Wednesday that he was surprised to find himself out of a job.
Quinones, who had been with the company more than a year, said he had heard rumors of impending layoffs for about a month but figured the 50-hour workweeks he regularly put in would save his job.
He was wrong. At 9:30 a.m. Wednesday, his boss called him into his office and delivered the bad news. He exchanged phone numbers, e-mail addresses and hugs with his colleagues. Then he was gone.
Quinones said he planned to spend the day at the pier in Newport Beach pondering his future.
Within a week, he expects to begin a job search, although he said the market for tech workers is the worst he’s seen in two decades. With a monthly mortgage of $1,200, the Montclair resident, who earned more than $70,000 a year, said he feels slightly nervous about his prospects.
Laid-off workers received two weeks’ pay, plus one additional week for every year on the job, Quinones and others said.
