Ingram Micro Lays Off 1,000 As Part Of Cost-Cutting Plan

As part of an aggressive cost-cutting plan, Ingram Micro Inc., a wholesale distributor of technology products and supply-chain management services, will cut about 1,000 jobs throughout its U.S. operations. The reduced headcount is expected to save the company $30 million to $40 million annually. Ingram also plans to close its Newark, Calif., distribution center and returns-processing centers in Santa Ana and Rancho Cucamonga, Calif.

Just like its high-tech customers and partners, Ingram is feeling the effects of slow sales and reduced demand for IT products, but the company also attributes some of the job cuts to efficiencies gained from IT investments. "Because of our investment in IT and automation, we are not afraid of cutting muscle," says Guy Abramo, chief strategy and information officer. "We are able to handle more work with less people."

Ingram is developing and deploying a number of applications that will reduce the number of people, processes, and facilities needed to conduct business. Ingram's sales team is piloting a program that will give sales reps the information to handle customer-service queries. It's expected to be in full use by mid-August. Ingram is also sharing information with its customers by using collaborative applications based on XML and electronic data interchange, which transmits invoices and purchase orders directly into vendors' databases and ordering systems. "We want to make EDI more Web-friendly so it can produce information in real time, rather than in batches," Abramo says. Using XML, which is based on open standards, helps Ingram to be more flexible and accommodating to its partners' software formats.

Ingram may be feeling the trickle-down effects of a slow economy, says AMR Research analyst Larry Lapide, but its use of IT is what will help it ride out the tough times. "A year ago, the believed concept was that dot-coms would replace distributors," Lapide said, "but that's not going to happen to Ingram, because it has leveraged the Internet to improve efficiencies."