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Arrow Electronics to axe 1,000 staff
US disti warns of consolidation
Arrow Electronics has added its own job cuts warning to the day's casualties.
The PC components distributor warned it would axe another 1,000 jobs during the third quarter after it reported a Q2 profit nose-dive of 92 per cent.
The New York-based company posted net income of $7 million for the second quarter. Sales fell 21 per cent to $2.5 billion.
The company, which has more than 200 sales offices worldwide, said it would introduce cost-cutting measures aimed at saving it $100 million a year.
This included job cuts, consolidating its facilities and delaying certain projects.
Today's job cuts will add to Arrow's staff scrapheap - it has already laid off around 500 employees so far this year. The distributor, which has around 12,000 staff, did not say which facilities would be consolidated.
The company said computer products revenue fell four per cent to $6.9 million, but "strengthened toward the end of the quarter". Components revenue dropped 26 per cent to $1.8 billion.
"Although we are seeing some hints of the early stages of recovery from the depths of the recession in our mid-range computer businesses, we do not yet see similar signs in the components sector," said Arrow CEO Francis Scricco.
The company warned that it expected Q3 to be "somewhat worse" than Q2 due to a combination of OEMs and manufacturers still ordering at greatly reduced rates and the traditionally slower summer months.
Arrow was in good company with today's announcement - US telecoms giant Lucent Technologies also warned it would cut between 15,000 and 20,000 jobs, while UK outfit Invensys said around 2,500 staff would be laid off. ®