CompUSA, the nation's largest computer retailer, said Monday it was cutting half its 3,600-strong commercial sales force as part of efforts to cut costs in the face of competition and price pressure.
CompUSA said it was reorganizing its commercial sales business along more centralized lines, cutting 1,800 jobs out of 3,600. It said 1,300 of those employees would be offered new jobs in the revamped organization.
Separately, CompUSA said its losses widened to a diluted 70 cents per share or US$64.5 million in the fourth quarter of its fiscal 1999, which ended June 30, from $51.4 million or 57 cents per share in the same period a year earlier.
The superstore chain also said it was expanding its build-to-order service on the Internet, where rival computer makers have been luring away customers.
The steps are part of a previously announced restructuring plan aimed at reviving sales and raising margins after a string of disappointing quarterly results in the fiscal year 1999 that ended on 30 June.
Shares of the Dallas-based company were down Monday, closing 37 cents off at $6.68 on the New York Stock Exchange.
The commercial sales operation serves large corporate, government, and education customers. Its employees are a smaller part of an overall sales force of 22,000 at 210 superstores.
"Previously, our commercial sales were store-based, which resulted in duplication of sales and support staff in multi-store markets," Tony Weiss, executive vice president of business solutions, said in a company statement.
Under the new plan, commercial sales will be organized in regions under area sales managers with regional technicians and centralized support offices, Weiss said.
CompUSA did not say whether the sales force reduction was in addition to as many as 1,500 job cuts it had anticipated in its overall work force when it announced restructuring plans in June.
In a separate statement, CompUSA said it was expanding features and services on its Web site, which offers desktop and portable computers that customers can configure individually.
Dogged by soft margins, weak consumer demand, and slumping selling prices for personal computers, CompUSA on 24 June said it would take a number of steps to cut jobs and costs, streamline operations, and move into selling higher margin products.
In July, CompUSA said it had signed a letter of intent to turn over its direct sale distribution business to Ingram Micro Inc. in a deal worth an estimated $10 billion over five years.
The outsourcing move for direct-sale orders from large customers in business, government, and education followed a decision to close CompUSA's own distribution and configuration center in Grapevine, Texas.
CompUSA said previously it expected to take charges of about $40 million to $50 million, or 43 to 54 cents a share, for the restructuring.
Copyright 1999 Reuters Limited.
