Acer chief: No layoffs from Gateway acquisition

Acer won't be axing any jobs from the ongoing acquisition of computer brand Gateway, according to company Chairman and Chief Executive Officer J.T. Wang. In fact, he's had to fend off many inquiries on whether his strategy to get ahead of Chinese personal computer manufacturer Lenovo (OTC: LNVGY) with the Gateway acquisition and the purchase of the European PC brand Packard Bell is wise in a market where margins are so thin and changes are so rapid.

Can Acer transform three companies into one, bring larger economies of scale into the picture, create a much better name for itself in the U.S. market, fend off fierce margin pressures and competitive threats and actually grow itself moving forward? That is a large order for any company, and similar to when Hewlett-Packard (NYSE: HPQ) bought Compaq back in 2001, there will be pundits who climb all over this and say that the Gateway (and Packard Bell) purchase was a mistake.

But then last week, Acer announced a quarter that saw 5.44 million computers shipped in its Q3 period -- a growth rate of 59% from the year-ago quarter. Well, duh. Why wouldn't sales spike in a year where a major acquisition took place? Acer's Q3 profit also went up, landing at $90 million (up 58% from 2006's Q3 period).

After market jitters due to acquisition worries in August, Acer's shares hit a 52-week high yesterday on the Taiwan market. This is still too short of a time to judge the Gateway purchase strategy, but it's a good start for Acer, which most likely stands to make more than the $710 million price tag for Gateway in the next three years or so. That is, unless PC sales slump, which they have not been doing in recent years as laptop sales have caught on fire.