Ingram Micro to Lay Off 850 People, 3.5% of Company

IT distributor Ingram Micro will shed about 850 employees as it plans for "long-term growth."

The now publicly traded company on Monday announced a series of restructuring moves. The initiative will terminate the 850 associates before the end of the next quarter.

"These changes aim to enhance organizational efficiency and strengthen customer service capabilities to better position the company for long-term, sustainable growth," the company said in its short statement. "Consistent with the company’s standard practices, Ingram Micro is committed to providing support to all associates impacted by these actions."

CEO Paul Bay said in the company's latest earnings that it employs more than 24,000 people. That makes a layoff of 850 a 3.5% workforce reduction. This comes after a much smaller reduction in force that Ingram announced in February, which included 60 people at a now-closed Missouri facility. Ingram Micro also conducted substantial layoffs in 2023. Chief financial officer Mike Zillis confirmed on the distributor's latest earnings call that it was engaging in "cost-reduction efforts." Executives have stated that Ingram's Xvantage digital platform is allowing for some of these shifts.

Ingram Micro's Mike Zillis

"We intend to continue investing in innovation while continuing to improve our [operating expenditures] leverage as we also benefit from the increased efficiency Xvantage provides," Zills said on Nov. 12. "Since the beginning of 2023, we have taken $140 million of opex out of the business because Xvantage allows for higher automation and more value-added deployment of our resources. This provides a compelling profit story as we leverage this increased productivity going forward."

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Ingram Micro's net sales dropped from $54.4 billion in 2021 to $50.8 billion in 2022 to $48 billion in 2023. Its first quarterly earnings results since going public showed a 1.4% year-over-year decline, from $11.9 billion to $11.8 billion. Executives attribute declines in North American net sales to "client and endpoint solutions."

"We are quite proud of the fact that we have maintained this level of profitability in what has remained a softer environment in several areas as we have not only managed the business well to drive gross margin accretion, but we have also managed costs well despite a continuing inflationary environment across much of our ongoing cost base while also making targeted investments towards our long-term strategic growth," Zillis said on the earnings call.