Gateway Unveils Wireless Networking Products After Cutting Jobs

The PC and electronics maker is entering new markets even as it trims at least 450 jobs and prepares to close a desktop manufacturing plant.
Gateway Inc. on Thursday introduced its first line of Gateway-branded wireless networking products, including a broadband router, a USB device, a PCI adapter for notebooks and desktops, and a Cardbus adapter card. These new wireless networking products come a week after Gateway entered the storage subsystems market with the release of its 850 SCSI JBOD storage subsystem and 820 Linear Tape Open Autoloader.

Gateway's expansion into new markets comes even as the company struggles to cut costs and turn around more than two years of losses. Gateway said Wednesday that it would cut 450 jobs and close its Hampton, Va., desktop-making facility.

This reduced the company's total number of employees to 8,000, although more cuts are likely at Gateway's North Sioux City, S.D., and Sioux Falls, S.D., facilities, says a company spokesman. Gateway reduced its workforce by about 1,900 employees during the first quarter of 2003, according to the company's 2002 annual report.

The cuts are expected to reduce annual costs by $115 million to $130 million, in addition to $400 million in annual costs that Gateway pledged to cut in May. Gateway said it would record charges of $120 million to $160 million for severance and related costs. Those charges will be posted against earnings in the third and fourth quarters of this year and the first quarter of next year.

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