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Tech Industry

Ingram Micro cuts staff, business centers

The electronics distributor is to let go as many as 1,000 people and close distribution centers as part of a cost-cutting plan.

Electronics distributor Ingram Micro will let go as many as 1,000 people as part of a cost-cutting plan.

The move is designed to save the Santa Ana, Calif., company $30 million to $40 million a year. Ingram Micro is a wholesale distributor of technology products and services. The company said Wednesday that it has been hurt by softening demand.

Ingram also plans to close its Newark, Calif. distribution center and Santa Ana and Rancho Cucamonga, Calif., returns processing centers. It will also cut back operations at its Miami distribution center. All returns processing will be run out of its new Harrisburg, Penn., returns center.

The company anticipates taking a restructuring charge of not more than $15 million in the second quarter.

"We took aggressive action based on our analysis of business process improvements and the market," President Kevin Murai said in a release. "Our decision to make reductions to our headcount is difficult, but necessary. However, the strides we are making in inventory management and automation, for example, enable us to streamline our operations without disrupting our productivity and service objectives," he said.

The slowdown in the tech market has already made its presence felt at Ingram Micro; the company saw net sales drop 8 percent in the first quarter compared with the previous-year period.

The news doesn't appear to be turning good anytime soon; research firm IDC said Wednesday that it expects to see the PC market decline 6.3 percent in the United States.

And just last week, competitor Tech Data told analysts to trim earnings projections for future quarters.

Ingram Micro executives said they would consolidate product management teams into four groups--systems, networking and high-end storage, peripherals and software--down from six groups. They also plan to restructure the sales force.

The company's shares were down 9 cents to $13.49 by market close.