Gateway Shares Surge on Cuts

Shares of Gateway Inc. rose 12% on Friday, one day after the manufacturer of personal computers said it would close all of its retail stores and fire 2,500 employees.

Gateway increased 66 cents to $6.06 on the New York Stock Exchange. The shares have risen 32% this year.

The changes are among the first by new Chief Executive Wayne Inouye to cut costs and stem three years of losses. Gateway’s 188 stores, scheduled to close April 9, drove costs to three times that of rivals Dell Inc. and Hewlett-Packard Co.

The job cuts will reduce total staff by 38%, Gateway said late Thursday.

“The stores have been a money-losing proposition,” said Ray Rund, an analyst at Cleveland-based Shaker Investments Inc. “By closing them, people are thinking they have the opportunity to improve their profitability.”

Shares of Poway, Calif.-based Gateway have more than doubled in the last year.