November 3, 2006 11:34 AM PST

Gateway trims work force

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Gateway announced Thursday it cut approximately 5 percent of its work force as part of an initiative to reduce annual expenses by as much as $35 million.

The cuts, announced during Gateway's third-quarter earnings call with analysts, resulted in the elimination of approximately 100 positions this week, bringing the computer maker's work force down to roughly 1,700 employees.

Gateway, which has been struggling to boost revenue and improve profitability, is the latest hardware maker to resort to layoffs. Chipmaker Intel, for example, announced in September plans to cut 10,500 positions through the middle of next year in an effort to save $2 billion annually.

As part of its job cuts, Gateway eliminated corporate support positions, which typically include those in marketing, human resources and clerical categories. This round of layoffs, however, is far less severe than that of two years ago, when Gateway announced plans to cut more than 1,500 positions.

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