Nearly 200 Utah employees of Packard Bell NEC Inc. will lose their jobs by the end of the month, a 22 percent reduction in force at the computer company's Magna facility.
Packard vice president of corporate communications Ron Fuchs confirmed the layoffs Thursday, saying improved product quality and a new self-help Web site reduced the need for customer service employees.The Magna plant functions mainly as a call center for customers and consumers, with nearly 900 employees.
Employees were told about the job cuts in a series of meetings Wednesday and Thursday, Fuchs said. The job cuts will extend "across the board" at the Magna plant, affecting customer service workers as well as supervisors.
"We've tried everything possible to keep this from happening," Fuchs said. "But in this business the call volumes have decreased, so we need less people."
Workers affected by the cuts will be informed "sometime within the next week," Fuchs said. They will receive severance packages to help with job transition.
One Packard technician, who asked not to be identified, said the announcement did not come as a surprise.
"We've felt that something was going to happen for the last couple of months now," he said. "Packard used to sell half of all (personal computers) sold, and now they're only selling a fraction of that. Lots of people here have left over the last few months. Even managers have left."
Last year, the company cut about 1,000 jobs in its five main U.S. offices and other sites. The Magna facility was shielded from the initial cuts but was unable to escape the second round.
"We have been in what we call a turnaround mode," Fuchs said. "For several years, the company was losing money. But we have new leadership, and we're changing the way the company is structured and how we bring products to market."
Those changes resulted in a 40 percent reduction in costs, Fuchs said, as the company streamlined its work force and placed greater emphasis on bringing its cost structure in line with industry norms.
"These cuts are not unique to Packard Bell NEC and are certainly not unique to the industry," he said. "On the upside, the turnaround is starting to take place. That's the good news. We've got a handle on it, and we're moving forward.
"But, with these kinds of actions, unfortunately some workers in Magna will be affected."
Packard Bell NEC is a privately held corporation based in Sacramento, Calif. It is currently the fifth largest vendor of personal computers worldwide, according to International Data Corp., an independent industry research firm based in Framingham, Mass. Other Packard facilities in the United States are in Woodland Hills, Mountain View and Foxboro, Calif., along with the plant in Magna.