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Distributor Ingram Micro Inc. said Monday it is laying off 550 employees and outsourcing most of those positions overseas in a move to increase operating efficiencies and consolidate some business functions.
The Santa Ana, Calif., company, the worlds largest IT distributor, released a statement that predicts the moves will produce savings of $10 million this year and ramp up to an annualized savings of $25 million by the first quarter of 2006.
About 50 percent of the layoffs will be at company headquarters and the remaining from locations across North America, mostly the companys Buffalo, N.Y., and Canadian operations. Some marketing and finance functions will be consolidated, he said.
“This is not a reduction in the number of people we have touching customers,” Keith Bradley, president of Ingram Micro North America, told ChannelInsider.com. “Were still committed to the exact same level of service and customer experience.”
No field sales or management positions will be affected by the moves, said Bradley.
Ingram Micro employs 13,500 people globally.
Ingram will outsource to a global outsourcing services provider by years end transaction-oriented service and support functions, including selected North America positions in finance and shared services, customer service, vendor management, and some positions in technical support and inside sales.
The distributor is negotiating with two outsourcing providers and expects to choose one by the end of this month. It will then conduct extensive training sessions at the outsourcing company.
The move comes five days after the company announced that its chairman and chief executive, Kent Foster B. Foster, is retiring after five years at the helm. He will be replaced by Ingram Micro co-President Gregory M.E. Spierkel. Co-President Kevin Murai is being promoted to president and chief operating officer.