250 staff face the axe as GE Capital quits PC business

Reseller giant GE Capital IT Solutions (GECITS) is to stop selling PCs and plans to cut 250 jobs.

Reseller giant GE Capital IT Solutions (GECITS) is to stop selling PCs and plans to cut 250 jobs.

In a move which illustrates the financial pressure on resellers, the fourth largest dealer in the UK has embarked on a three-month consultation period with its workforce, which will lead to the closure of its Rossendale office and the loss of 250 staff.

GECITS bought the P&P desktop business from Skillsgroup in January last year for £26.5 million. At the time, Jeremy Golding, UK chief executive of GECITS, said P&P's main weakness had been a lack of investment by Skillsgroup because it was not seen as a core business. "Now it's an IT solutions organisation, it will be given investment," he said.

Last week, Craig Kershaw, associate director of European PR at GECITS, said the reseller was moving away from the PC distribution business to concentrate on adding value and to "realign itself around the ebusiness infrastructure services market. That's the direction in which the business is moving - direct PC sales is not a long-term, viable business model."

Kershaw said one of the options being considered was moving all of the IT solutions business under one roof, which will probably be located south of London, and having regional offices in central London and northern England. He would not say how many jobs were in danger, but said there was no chance the business will be sold, adding that GECITS is likely to keep its server product business.

The consultation period started this month and will be finished in mid-February.

One analyst, who asked not to be named, said the move was unexpected. But he said GECITS had not been making any money or headway in PC distribution.

"The troubles in the market are not doing GECITS any favours. It decided it was time to look at the areas in which it can establish good margins," he added.