Gateway said it will close call centers in Hampton, Virginia; Vermillion, South Dakota; Lake Forest, California; and Salt Lake City. The company will keep open call centers in Sioux Falls and North Sioux City, South Dakota; Kansas City, Missouri; Rio Rancho, New Mexico; and Colorado Springs, Colorado. There won't be any firings in Gateway plants in North Sioux City, South Dakota, Waitt said.
Gateway said it's realigning into six business lines.
Besides PCs, they will include communications, applications, learning, financing and services. Gateway said it will begin reporting revenue and gross profit for each in the fourth quarter.
Gateway has offered those services for more than a year as part of its strategy, called "Beyond the Box,'' to sell products with higher margins than PCs.
"They've always been focused on those six areas," Niles said. "It isn't new stuff." The new model will enable the company eventually to have a 7 percent operating margin, Waitt said on a conference call.
"The question is when," he said.
Gateway averaged a 6.1 percent operating margin in the five years prior to 2001.
CFO Burke said the company is aiming for 7 percent by the second half of next year.
The non-PC lines have revenue of about US$120 billion and PCs add another US$100 billion, Waitt said.
"We're going after a much bigger pie than we've gone after before," Waitt said.
RSS