Gateway founder Theodore Waitt will again take the reins of ceo, following the abrupt resignation of Jeffrey Weitzen. Weitzen's resignation came just a couple of weeks after he announced losses of $94.3 million for the quarter ending Dec. 31, 2000, warned of continuing difficulties for the next six months (due in part to the soft consumer computer market and in part to the company's swollen inventories) and told of immediate cost-cutting measures.
Weitzen, the professional manager Waitt had hand-picked to run his San Diego-based PC company a little more than a year ago, said in a statement that he was retiring to spend more time with his family. That was the same reason Waitt had given for stepping aside in favor of his then president and ceo.
Weitzen, who had been aggressively recruited by Waitt from AT&T, had a rough ride at Gateway's helm. His year began with the industry caught in a wave of parts shortages that forced Gateway to fall short of earnings expectations. The year ended with consumer computer sales slowing unexpectedly, forcing yet another shortfall.
Weitzen's strategy for Gateway had been to reduce its dependence on PCs and shift its emphasis to marketing a wide range of peripheral products connected to the Internet or computers along with software and services. He also accelerated the development of a chain of retail stores to go along with its direct sales approach by telephone and the Internet. At the time of his cost-cutting announcement earlier this month, Weitzen said plans for retail expansion would nonetheless go forward. Analysts called the strategy sound, but the new markets developed more slowly than Gateway had evidently expected. They predicted the financial outlook for the company could well get "substantially worse" before it got better.