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Acer to write off $150m in 'abnormalities'

updated 12:20 pm EDT, Wed June 1, 2011

European staff reductions, quarterly loss seen

On the heels of a drop in profits for the first quarter of 2011, Acer said today that it will take a one-time charge of US$150 million to reflect "questionable" accounts of its European inventories and receivables. The company will also reduce staff in the region by 15 percent, or 300 of its 2,000 European employees. Acer did not indicate when it would book the charge or if other charges related to the layoffs would be added.

The moves come after the forced departure of former CEO Gianfranco Lanci in late March over what the company said was a wide range of issues. Lanci blamed his ouster primarily on his inability to convince Chairman J.T. Wang and other Acer board members of the response Acer should take to the iPad. Wang has said the irrational success with no long term impact.

Since Lanci's ouster, Wang has moved into the role of interim CEO and started a large scale reorganization to shift the its focus to tablets and other mobile devices. Currently, 73 percent of the company's revenue is tied to sales of netbooks. The discrepancies in Acer's European inventory were uncovered during an internal audit triggered by the reorganization.

If the company posts the writeoffs associated with its European restructuring in the current quarter, analysts predict that the company would post a loss of as much as $3 billion. Acer recently reported its profits for the first quarter of 2011 dropped 64 percent.

Wang said he will forfeit his salary and bonus for 2010 due to the write-off. Other board members have offered to halve their compensation. Company management has proposed cutting the employee bonus for 2010 by 40 percent. Dividend payout will be unchanged at TWD$3.6 (US$0.126) per share. [via Wall Street Journal Online]




by MacNN Staff

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Comments

  1. dijonaise

    Joined: Dec 1969

    +2

    Wow!

    So the Italian was hiding unsold inventory in the EU and they finally couldn't find anywheres else to "stuff" their crappy plastic half assed products.

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