Gateway jobs go in Japan, Malaysia

KUALA LUMPUR, Malaysia -- U.S. computer maker Gateway's exit from Asia will cost the region some 1,350 jobs, with Japan and Malaysia bearing the brunt.

The PC company announced on Tuesday in the U.S. that it is laying off 25 percent of its global workforce of about 19,000.

It said it is closing down operations in Australia, Japan, Malaysia, New Zealand and Singapore.

In statements issued Wednesday in Asia, Gateway said it had closed all 18 Gateway stores throughout Australia and New Zealand, its manufacturing plant in Malaysia and its regional office in Singapore. It had also closed all 18 stores it directly operated in Japan.

In all, Gateway said about 700 employees in Japan were affected, along with about 400 in Malaysia, 28 in Singapore, 200 in Australia and 19 in New Zealand.

Malacca plant produced PCs for region

Gateway's Malaysia plant in the western state of Malacca started operations in July 1997, producing personal computers for the Asia-Pacific region including Japan, Australia, New Zealand and Oceania.

Gateway is the U.S. market's fourth biggest PC company. It said support, warranty and parts services would continue in Asia.

Gateway had been banking on growth in the Asia-Pacific consumer market, which formed about five percent of its global revenues at the end of December 2000, to help buffer earnings against the slowdown in U.S. demand.

But the company has been hit hard by a PC price war with rivals Dell Computer Corp, Compaq Computer Corp and Hewlett-Packard Co.

Gateway said it will cut a total of 4,600 of its global workforce, take a $475 million third-quarter charge and could exit European operations as well.

Continues tech cutbacks in Asian

Gateway's move is the latest in a spate of job cutbacks by technology and electronic companies in Asia and elsewhere.

Hitachi Ltd, Japan's largest electronics maker, is compiling a restructuring plan that will call for trimming trimming 20,000 jobs, or six percent of its group-wide workforce.

Hitachi already announced last month that it would stop cathode ray tubes for personal computer displays and close plants in Singapore and Malaysia employing 2,600.

On Monday, Toshiba Corp, the world's second-largest chipmaker, said it would cut 18,800 jobs, or 10 percent of its global workforce by March 2004 in a bid to bolster profitability in the wake of the electronics slump.

Reuters contributed to this report.