Economic Layoffs at Gateway

Essay by jah_rule24 February 2005

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Economic Layoffs at Gateway

Macroeconomics is the study of the economy as a whole, which includes inflation, unemployment, business cycles, and growth (Colander, 14). In today's society, Americans rely on having the option to have multiple service providers for their home or office. Several businesses especially those who work nationally or internationally with other businesses, try to find the inexpensive and new innovative ways to reduce cost. My brother currently works for Gateway Computer Incorporated. He provides business consulting services to hundreds of companies worldwide. Gateway has offices, retail stores, and distribution centers throughout North America and Canada. An article in The Wall Street Journal dated March 18, 2004 talks about how Gateway, a main producer of personal computers, which serves the aerospace, automotive, commercial transportation, just to name a few along with other industrial markets is planning to cut about 1900 of its 11000 jobs in the United States this year and relocate these consulting jobs to India in a bid to cut costs.

The company also plans to close 76 of their 268 retail stores.

The reason for the reduction and relocation of jobs for Gateway will be done in an effort to offset $1.34 billion dollars in debt incurred over the last three years. In December of 2001 the company had just completed a two-year campaign to cut costs by $1 billion dollars by reducing the workforce by 25%. The article states that by reducing the workforce by another 17% the company will begin to see profits at the 550,000 units sold verses the break even strategy they are currently operating under.

The topics of supply and demand are very important in the economic aspect of business. Supply is a schedule of quantities of goods that will be offered to the market at various prices (Colander, G-9).