Gateway closes New Zealand operation

Personal computer maker Gateway is closing its New Zealand operation as it cuts about 25 per cent of its worldwide work force.

Staff arriving at the Gateway retail store in Auckland this morning found the doors locked and protected by security guards.

Gateway said in a statement today that their 19 New Zealand employees had been called to a staff meetings and told they would laid off within the next few days.

The company's workforce in this country comprises mainly retail staff at its three stores - in Auckland, Wellington and Christchurch - and distribution centre in Albany.

Gateway computers are imported pre-assembled from manufacturing plants in Malaysia.

The company said all customers who ordered a computer in the last 14 days would be eligible for a full refund and would be contacted to see if they wanted to proceed with their order.

"Support, warranty and parts services will continue, so existing customer support will be maintained. Customer support services will continue without interruption through existing third party service providers already providing Gateway customer support in Australia and New Zealand."

Gateway bought home-grown PC assembler PC Direct in 1998 for $7 million and while the purchase gave Gateway access to a well-established customer base, the stripped-down local operation failed to capitalise on it.

Last year, Gateway struck a deal with retailing giant The Warehouse to sell its computers through Warehouse Stationery stores across the country.

However, the company has been affected by a price war, led by rival Dell, as the downturn in PC sales hit the computer market.

The company is also closing its Australian operations, at the cost of 200 jobs, and other businesses in the Pacific Rim - Japan, Malaysia and Singapore. Gateway is also looking at a possible exit from Europe.