HP, meanwhile, disclosed that it no longer expects to meet earlier projections for its fiscal first quarter, which ends this month. HP had been counting on continued strength in purchases by corporate users, Fiorina said. First-quarter earnings will likely come in below plan at between 35 and 40 cents a share, and Fiorina said the company is no longer providing estimates for the fiscal year as a whole. That one-two punch is expected to continue being felt at least through the first half of this year, the company added. Gateway said the workforce reduction is due to be carried out this quarter and will be accompanied by other steps aimed at improving profitability, including a streamlining of its manufacturing operations, a consolidation of its suppliers and reductions in selling and administrative costs.
Tough times call for tough decisions.
Weitzen said Gateway executives had expected a rise in PC demand during December based on what had happened in previous years. Softer sales have caused inventories of our competitors to swell and have touched off an aggressive pricing environment that will have negative consequences for the PC sector for the next six months. Sharon Machlis and Lucas Mearian contributed to this report. For more financial and corporate news involving technology vendors, head to our Financial News page. Computerworld Inc. All rights reserved.