Management Shakeup Costs Gateway

Gateway has had ups and down in recent years, but it's never stood still. That continues to this day as the Poway, Calif.-based company has announced yet another management reorganization as it combines forces with the recently acquired eMachines and attempts to bounce back from recent losses stemming from its efforts to reinvent itself as an end-to-end consumer electronics and PC provider.

Lost in the reshuffling are a host of executives, including Jocelyne Attal, executive vice president of Gateway professional who joined Gateway from IBM less than seven months ago to oversee much of the company's channel restructuring, and Joe Formichelli, executive vice president, operations. Also out: Steve Phillips, senior vice president and CIO; T. Scott Edwards, executive vice president, consumer; Nemo Azamian, senior vice president, customer service & support; and John Engel, senior vice president, PC products group. According to the company, all will depart after a "transition" period.

The reorganization comes two months after Gateway bought eMachines and installed eMachines CEO Wayne Inouye as president and CEO. The deal moved Gateway's founding CEO Ted Waitt upstairs to the chairman seat shortly after VARBusiness identified his as one of the three toughest CEO jobs in the industry.

Gateway spokesman Bob Sherbin wouldn't comment directly on the executive departures but says the restructuring sets up what Waitt and Inouye view as the company's strongest team. "This is a new Gateway with a new CEO, and Ted and Wayne have put together a team that they feel has the right combination of talent and skills to take us where we want to go," Sherbin says.

The new structure will have 13 executive vice presidents reporting to Inouye,in contrast to the current four,including six who hail from eMachines. Under the new regime, Steve McAllister, Gateway's vice president and general manager of alternate channels, and Errett Kroeter, director of channel programs, will report to Scott Weinbrandt, senior vice president, professional. "Scott has enormous respect both internally and externally and is well positioned to pick up where Jocelyne left off," Sherbin says. He adds that Formichelli's departure is best attributed to the fact that the new structure has no specific operations role, so Formichelli's tasks will be handled by several different people.This is just the latest in a long line of management changes for the company. Gateway overhauled its partner programs last year and turned over much of its senior management between Fall 2002 and early 2003. Waitt himself left the company for a year before returning as CEO in January 2001, but none of the people he named to his management team then are on the roster of current senior executives.

After remaking itself from a PC manufacturer into a provider of a comprehensive line of business and consumer products and solutions, Gateway surprised some observers with the acquisition of PC developer eMachines. But Sherbin says the acquired company's international strength and entry-level PCs are a perfect fit for Gateway. "One of our failings in recent years has been our inability to come up with a competitive system on the low end," he says. "eMachines has been able to do that very well."