Ingram Micro has warned that the current recession will be the worst the IT industry has ever experienced, with it warning that it will have to cut a further eight per cent of its workforce.
The prediction came as Ingram Micro announced fourth quarter losses of $564.3m after sales fell 13 per cent to $8.6bn. The firm incurred a $742.6m goodwill charge – excluding that the firm made a fourth quarter profit of $95.5m.
Despite a poor fourth quarter performance, full year sales fell just short of its 2007 record of $35bn, with 2008 seeing revenues of $34.4bn. Profits hit $410.5m for the year excluding the write down, while its gross margin was 5.92 per cent – the highest for a decade.
Sales in the distributor’s two largest markets – EMEA and North America – were down, due to falling demand. North American sales fell one per cent, however, EMEA was hit particularly hard with sales dropping 21 per cent.
Ingram Micro’s chief executive officer Greg Spierkel warned that the IT industry was in for a particularly bad time. "Business and consumer confidence are at their weakest in a decade. I would not be surprised to see negative growth for another three to five quarters, making this the longest contraction in out industry."
He also warned that the deteriorating conditions had forced the company to make the difficult decision of laying off a further eight per cent of the company’s workforce – primarily in North America and EMEA – in addition to the cuts announced last year.