Gateway pulling plug at Vermillion facility; 350 will lose jobs in October by David Lias The woes of struggling personal computer manufacturer Gateway, Inc. are being felt in Vermillion as the 350 people employed in the company's call center here learned Tuesday they soon will be unemployed.
Gateway announced a major global downsizing this week in the wake of poor financial news. The nation's No. 4 manufacturer of personal computers said Tuesday it is laying off 4,700 employees � 25 percent of its global work force � because of an increasingly bleak market. In a press release, the company said the layoffs will help save $300 million, and it expects to return to profitability in the fourth quarter.
Gateway also has plants in Sioux Falls and North Sioux City. But only workers at the Vermillion location, which is scheduled to close Oct. 28, will be affected in South Dakota.
The computer maker will offer jobs to 100 of the 350 people whose jobs will soon be terminated in Vermillion.
"If interested, employment will be offered to some Vermillion employees who would be interested in working in our Sioux Falls or North Sioux City locations," said Beth Etler, a Gateway spokesperson.
Etler, who works at the computer maker's North Sioux City facility, said several people from the Vermillion community are already employed there.
The Vermillion workers' jobs will end in 60 days, she said. Upon their release from employment, they will receive a retention bonus.
"And they will receive their severance pay on top of that," Etler said.
Gateway facilities in Sioux Falls and North Sioux City escaped downsizing. Vermillion joins Hampton, VA, Salt Lake City, and Lake Forest, CA. All four communities are losing either customer service or sales centers.
Gateway posted a loss of $20.8 million for the quarter ending June 30, compared with a profit of $118 million for the same period a year ago.
The PC industry saw its first-ever drop in sales this year. Some analysts predict it won't recover until next year or early 2003.