After abruptly dismissing its chief executive officer, Gianfranco Lanci, in March, Acer Inc (宏碁) dropped another bombshell yesterday, saying it was laying off hundreds of staff in Europe and that the company chairman was giving up his remuneration to cover US$150 million in losses from clearing excess inventory.
Acer was the world’s second-largest PC maker by shipments after Hewlett-Packard Co in the first quarter, according to market researcher Gartner Inc. IDC, another market research firm, ranked Acer third after Hewlett-Packard and Dell Inc.
Acer said in a statement that it planned to streamline its EMEA — Europe, Middle East and Africa — operations by axing about 300 employees.
Photo: Maurice Tsai, Bloomberg
Compensation, including severance pay, will cost the company about US$30 million, Acer said.
However, the streamlining will help Acer shave off US$30 million in annual operating expense, the statement said.
Acer’s board of directors yesterday also agreed to take a one-time write-off to clear high channel inventory and disputed accounts receivable in the EMEA — a region previously led by Lanci.
The company will provide these channels with US$150 million in sales allowance to clear inventory, it said.
“The discovery was found after the new management team carried out internal audits of the EMEA operation and discovered abnormalities in channel inventory stored in freight forwarders’ warehouses and in the accounts receivable from channels in Spain,” the statement read.
Chairman and chief executive officer J.T. Wang (王振堂) said in the statement that he was taking responsibility for the loss by fully relinquishing his remuneration from his position as a board director and his employee bonus last year.
The board also agreed to a voluntary remuneration reduction of 50 percent. It is also set to propose to shareholders at the company’s annual general meeting on June 15 to cut employees’ bonuses last year by 40 percent.
If approved, employee bonuses will drop from NT$1.5 billion (US$52.3 million) to NT$900 million, with the difference to be allocated as this year’s operating expense.
A proposed cash dividend of NT$3.60 per share will remain unchanged to protect shareholders’ interests, according to the statement.
Acer’s share price dropped 0.53 percent to close at NT$55.80 yesterday before the announcements. The stock has fallen 38 percent so far this year, trailing the benchmark index, which has risen 1 percent.
To lend support to its share price, Acer yesterday announced a new share buyback plan, aiming to repurchase 27 million of the company’s shares on the open market from today until August 1 at between NT$55 and NT$80 per share.
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