Packard Bell NEC announced plans last week to reduce its US workforce by up to 20 per cent by the year's end. The reduction in US staff will result in cutting 750 to 1000 positions in all areas of Packard Bell NEC operations, the company said. Packard Bell NEC's European operations, which have seen growth and profitability over the last four quarters, will not be effected by the US reductions. No reductions are planned for the company's Latin America and Asian operations.
In addition to reducing staff levels across every division and operation in the US, Packard Bell NEC plans to focus on eliminating unnecessary costs and improving its inventory management, said president and chief executive officer Alain Coulder in a statement.
The job cuts are part of a plan to reduce fixed costs and ensure long-term profitability, Packard Bell NEC said.
Packard Bell NEC has no plans to eliminate company departments or product lines as a result of the staffing cuts, said company spokesman Ron Fuchs.
The cuts in staff will be taken out across all functions, departments and job sites across the U.S. and will impact the company in all of those areas, Fuchs said. Packard Bell NEC needs to get costs in line to focus on delivering quality products to its customers, he said.
Fuchs was unable to elaborate on the financial impact that the staffing cut-backs will have on Packard Bell NEC since the company is privately owned. "The staff cuts are being done to reduce fixed costs, so it will have an impact on company finances," Fuchs said.
Packard Bell NEC, in which both NEC and Group Bull have a stake, has recently has seen a loss in marketshare and responded by consolidating and restructuring its operations in the U.S.
Yesterday's news is completely unrelated to Packard Bell NEC's announcement that the company has agreed to pay $US3.5 million to settle a federal lawsuit claiming that it had mislabeled used computers as new ones, Fuchs said.
Packard Bell NEC, a leader in the consumer market, admitted no liability in the case, said assistant U.S. prosecutor Susan R. Hershman in a statement.
Originally filed by a former employee, the lawsuit contended that Packard Bell NEC sold as new computers containing some refurbished parts from returned machine during 1989 to 1995.