Distribution company Ingram Micro is to close its operations center in California with the loss of around 1,400 jobs, in the face of expected poor sales during its next quarter. Ingram said last week that it expected to report first quarter net income of between $40m and $45m, significantly down on the $56.5m it reported in the first quarter last year.
The company blamed the usual Year 2000 and weak overseas market for the expected shortfall, along with intense margin pressure in US markets. But Ingram denied that the pressure was a result of more direct selling from PC giants such as Compaq Computer Corp and Dell Computer Corp, insisting that it was related directly to increased price competition.
The closure of the California operations center is intended to cut costs. In its place, Ingram plans to set up a merchandising organization to integrate its purchasing, vendor sales and product marketing. The company said it would also begin programs at its distribution centers to increase productivity.
