Ingram to Cut, Outsource 550 Jobs, Half of Them From Orange County
Technology distributor Ingram Micro Inc. said Monday that it planned to cut 20% of its North American workforce, or 550 jobs, and outsource the work to India and the Philippines.
Customer service, finance and technical support jobs in the U.S. and Canada will be trimmed for a savings of $25 million next year, Santa Ana-based Ingram said. The cuts will cost $26 million this year.
Ingram is talking with two unnamed firms and will announce an outsourcing contract by the end of the month.
About half of the job cuts will be in Orange County, spokeswoman Marie Meoli said. The rest will be in Buffalo, N.Y., and in British Columbia and Ontario, Canada.
The company has 13,500 workers worldwide.
Ingram and other companies are closing their human resources, call center, finance and other departments and paying firms including Electronic Data Systems Corp. and Accenture Ltd. to manage the work. Outsourcers say they perform data processing and other jobs more cheaply by sending the work overseas where labor and land costs are lower.
Ingram and rival Tech Data Corp. want to trim expenses and boost margins.
“Tech products are always getting cheaper, putting pressure on your margins,” said JMP Securities analyst John Coyle in San Francisco, who rates the shares “market outperform” and says he doesn’t own them. “They are always looking for ways to get costs out.”
Ingram shares fell 25 cents to $15.82 on the New York Stock Exchange.
Ingram said last month that it was seeing “pockets of increased competition and economic softness in some markets.”
Although the company won’t report first-quarter results until later this month, Ingram said last month that it expected net income of $47 million to $50 million, or 28 cents to 30 cents a share, excluding any one-time costs. Sales in the quarter ended April 2 are expected to rise to $7 billion to $7.2 billion from $6.28 billion a year earlier.
Ingram Micro is seeing strong overseas demand for its products, with the euro’s rise against the U.S. dollar making products less expensive for European companies. European sales rose 7.9% to $2.99 billion, or 40% of total sales, in the most recent quarter.
