Systemax pulls plug on UK PC assembly
Manufacturer axes more than 100 jobs in major restructuring move
In a move that will send tremors through the channel, system builder Systemax Europe announced last week that it will stop manufacturing its PCs and notebooks in the UK.
The firm, which also axed 104 jobs as part of the major restructure, said it will now source all products from its US facility. The jobs were cut at two of its UK subsidiaries: Walthamstow-based Simply Computers, its online business-to-consumer division, and the Systemax PC build team based in Greenock, Scotland.
Systemax Europe, part of the US-based Systemax Group, sells its branded and own-label products through Simply Computers and its online corporate reseller division, Misco.
Terry Shaw, vice-president of European operations at Systemax Europe, said operating activities at Simply Computers will be "consolidated" into its Wellingborough office. However, this will create "immediate job opportunities" in other areas of the business as the firm starts an "aggressive recruitment campaign to expand its Misco sales operation", Shaw claimed.
Just last year Systemax axed 50 staff from its Greenock site. Yet the Group posted positive results for its third quarter ended 30 September 2004, with a 13.6 per cent increase in turnover to $460m and profits up by 41 per cent to $2.7m.
Les Billing, managing director of system builder Microtronica, said he is not surprised. "There is a lot of consolidation in the PC-assembling industry. Business went fairly quiet in December and retail is not doing as well as expected," he said.
"Systemax has been around for a long time, but this does call into question whether the e-commerce model is successful and whether or not this type of business is the way forward."
Nitin Joshi, partner at accountancy firm PKF, said: "Firms such as Systemax have to compete with brands such as Hewlett-Packard and Dell. The bigger names are popular with IT decision-makers, who can't see that smaller firms are better placed to provide more in-depth support and after-sales service."