Struggling personal-computer maker Gateway has shut down all company-owned operations in Asia, laying off 1,347 workers and leaving only a token presence in Hong Kong. Gateway's exit from the region is part of a sweeping corporate revamp that has cut 25 per cent of its worldwide workforce and led to a US$475 million third-quarter charge, including costs for the company's possible withdrawal from Europe. The company announced yesterday the immediate closure of all its stores, and its marketing, sales and manufacturing operations in Malaysia, Singapore, Japan, Australia and New Zealand. A final decision on the future of its European operations is expected within a month. According to Gateway Asia-Pacific vice-president Sam Weiss, the company began a market-by-market review of its operations early this month to see how it could implement a strategy to grow and make money in the region. 'Regrettably, the company has concluded that it will not be able to invest the necessary resources to achieve this result in much of the Asia-Pacific region,' he said. 'Support, warranty and parts services will continue without interruption. Outsource partners already provide Gateway customer support.' In Hong Kong, the company's retail stores in Causeway Bay and Central have been run by outsourcing services provider Vsource since last month. Markets most affected by Gateway's retrenchment plan in Asia are Japan, where all 698 employees at its Yokohama-based subsidiary lost their jobs, and Malaysia, where 404 workers at its manufacturing plant in Melaka were laid off. A total of 245 jobs were cut in Australia, New Zealand and Singapore. The company's exit from Asia comes nearly seven years after it first set up shop in the region to compete against rival build-to-order PC vendor Dell Computer and other multinational vendors. Gateway established its manufacturing plant and first Asian retail outlets in Malaysia. In Asia, as in the rest of the world, Gateway has been hit hard by the continuing slump in PC sales, as developed markets become saturated and cash-strapped businesses hold back on investments. The firm has also struggled with the high cost of maintaining its own manufacturing, distribution and retail networks, particularly with the low prices and high power of entry-level computers. While the company remains in the top four of US PC vendors behind Dell, Compaq and Hewlett-Packard, its market share has slipped to just 7.4 per cent. Worldwide, Gateway's share has been insignificant. 'Gateway never really made an impact in Asia, and the economic downturn made it harder for the company to compete against the more established US-based vendors as well as the prominent brands from the region,' said Kitty Fok, associate director for Asia-Pacific personal systems research at International Data Corp. Second-quarter results for Gateway showed US$1.5 billion in revenue and a net loss of US$20.8 million, following earlier initiatives to streamline operations. The company intends to focus more of its resources in its core United States market.