The job cuts made at Ingram Micro UK in May cost the distributor about $2.1m in its second quarter, according to figures released last week.
The hit resulted from Ingram Micro's decision to split its UK arm into four business units as part of a drive to target resellers more effectively (PC Dealer, 26 May).
Jerre Stead, chairman and chief executive of Ingram Micro, made the announcement as he revealed record sales, although profit fell slightly. He said: "We lost 70 staff in the UK as a result of our restructuring and consolidation scheme. This has been a significant drain from a profit standpoint."
But Stead added that the UK market still held opportunities for Ingram Micro. "It is a very competitive market with no overall market leader," he said.
For the second quarter ended 3 July, Ingram Micro recorded worldwide sales of $6.8bn, a 37 per cent rise on the same quarter in 1998 of $4.96bn.
Net income, including reorganisation costs of $2.1m, was $50.3m, down slightly from $55.6m a year ago.
US sales grew 23 per cent to $4.29bn with operating income of $90.3m.
In Europe, sales were $1.6bn, a 20 per cent growth excluding the acquisition of German distributor Macrotron, which was absorbed into Ingram Micro during the second quarter.
Stead said: "In Europe, the top three distributors only have 20 per cent of the market and each country has specific competition and pricing issues. The market was softer than we expected."
He admitted that Ingram Micro's PC assembly operation Frameworks, based at the former Tulip plant in the Netherlands, was losing money and could not predict when it would become profitable.
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