Packard Bell NEC slashes US workforce

Packard Bell NEC is closing its manufacturing plant in Sacramento, California, as part of a larger reorganisation that will result in layoffs of some 80 per cent of the company's US staff, and the withdrawal of the Packard Bell brand from the US consumer PC market.

The once high-flying PC vendor's CEO Alain Couder will leave the company later this year, and so will most of the unit's top executives, according to published reports yesterday.

Although executives at Packard Bell NEC Europe were unable to confirm complete details of the published reports, they did confirm that the Sacramento plant, which employs 1600 people, will close by January and that the US unit will outsource its PC manufacturing operations.

The name and location of the contractors have not been announced, said Graham Hopper, Packard Bell NEC Europe's managing director in the UK. Packard Bell NEC Europe and Packard Bell NEC are two separate companies, though both are owned by Japan's NEC and Groupe Bull SA, of France.

As for Couder's future, Hopper questioned the published reports that the former Bull executive will leave the company. "Alain Couder was specifically put in to restructure the company. I would assume that this [restructuring] is part of his strategy to reorganise the whole company," Hopper said. "I believe he will be leaving when the restructuring is completed."

Packard Bell NEC's US operation has for several years been a drag on parent company NEC's results. The Japanese electronics maker blamed part of its loss of 157.9 billion yen ($US1.3 billion) for the fiscal year, which ended on March 31, on large losses at the US unit.

NEC, which holds an 88 per cent stake in Packard Bell NEC, and partner Bull have invested a total of around $US2 billion in the troubled US PC unit.

The US turmoil will have no effect in Europe, where Packard Bell NEC continues to gain market share in PC sales, Hopper said.

Packard Bell NEC Europe, in fact, is among the leading PC sellers in the consumer market in Europe, said Hopper. This will be highlighted in a Dataquest report on European PC sales due out on Friday, which will show that Packard Bell NEC has taken the top position in consumer/home sales in Europe, he added. A spokesperson working at Dataquest's PR agency in London, however, could not confirm that the numbers will back up what Hopper said.

Officials at Bull in France could not be reached for comment.