Datrontech to dump staff after Q2 slump

Distributor to axe 25 staff in two-pronged company restructure following lower than expected profits for its second quarter

Datrontech Group has been forced to lay off 25 of its staff as part of a restructuring plan which will involve reorganisation and major systems improvements.

The redundancies follow last month?s profit warning when Datrontech admitted that its profits were not going to meet the stock market?s expectations (PC Dealer, 21 May).

Datrontech group managing director Mark Mulford, who joined in February, said the distributor had originally hoped to retain the staff if volumes picked up, but that sluggish trading in the quarter ended 30 June, coupled with lower than expected growth, meant they had to go. The redundancies will be from within the distributor?s sales, product marketing, admin and support teams.

Mulford said: ?Second quarter trading has been very, very tough, hence the profit warning. You saw what happened with Intel, which is a major franchise of ours, so naturally we got hit too.? He also blamed ?a lot of grey product out there? as being responsible for slow growth in both quarters.

Last week Kingston Technology, one of Datrontech?s key suppliers, cut prices on its memory modules by 25 per cent, but the distributor maintained that the price protection agreement it has with Kingston will ensure Datrontech will not be adversely affected.

Datrontech said it intends to counter the slump by introducing a broader product range ?within the next few weeks? and by diversifiyng into other areas. ?We will be looking at producing our own brands of memory and monitors,? said Mulford.

Also as part of its restructuring programme, Datrontech is moving its headquarters to Chineham, Basingstoke, on 7 July. Operations from its Aldershot, Guildford and Alton sites are relocating immediately.

The distributor said it will invest more than #800,000 on infrastucture over the next 12 months.