Acer cuts Chinese staff as PC sales slacken

The phenomenal rise of Acer shows signs of running aground just as the Taiwanese outfit looked set to achieve it long-term goal of becoming the biggest PC company in the world in terms of units shifted.

Worldwide revenue from PC sales this quarter is expected to slow in many market-watchers' view. Sales may slip by up to ten per cent in the quarter as demand slackens off in western Europe and the US, causing PC makers to cut back their forecasts.

Acer itself has predicted a flat quarter - expecting to ship around the same volume as Q4 2010. The outfit has come to expect continuous growth in a market that as a whole as also come to expect to shift more kit as time rolls on.

But the firm, which operates a light inventory and leverages its local expertise to deliver goods on a tight margin, could be one of the first to be hit by component shortages caused by the Japanese earthquake.

Acer has announced plans to cut its workforce in China by ten per cent in a move designed to impress investors if not workers.

Acer has increased its market share in China - an outpost to traditional high growth in PC unit sales through the acquisition last year of China`s Founder Technology Group's PC operation.

But the combination of slackening demand elsewhere and possible component shortages is giving investors the jitters. One consolation is that if Acer is the first PC company to be hit, it won't be the last.