Arrow plans to close its PC asset disposition business saying that since it was established, the market dynamics have changed.
Arrow’s CEO Michael Long announced the move as he noted second quarter results would fall short of expectations and shares fell seven per cent following a business update containing news of the planned closure.
Long said the shuttering will be “substantially complete” by the end of 2019 and will lead Arrow to incur charges of about $115 million in its the second quarter.
The actions will impact its asset disposition activities not only in the US but “most other countries in which the business operates”, with Arrow proposing to close the business in the UK, Sweden and Belgium where a consultative process will now begin.
Long said the announcement followed “careful market analysis”.
“This will allow us to continue to focus on our cross-enterprise strategy to enable next-generation technologies such as artificial intelligence, industrial automation, smart cities and vehicles”, he said, referring to the global components arm in which its asset disposition activities currently sit.
Arrow’s second quarter results will come in below expectations due to “deteriorating demand conditions in the global components business”.
Separately, Arrow announced an operating expense reduction plan designed to shave $130 million off its annual cost base.
“As we look to the rest of 2019 and beyond, we are taking decisive actions to preserve profits while maintaining our engineering and value-added capabilities to continue to guide innovation forward”, Long said.
