Arrow Electronics plans to wind down its PC and mobility asset disposition business in its native US and several other countries, including the UK.
The global distributor's shares tanked seven per cent today following a business update containing news of the planned closure.
Business dynamics have changed since Arrow entered the PC and mobility asset disposition market, CEO Michael Long said of the move, which is expected to be "substantially complete" by the end of 2019 and will lead Arrow to incur charges of about $115m in its Q2.
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.
The business update also revealed that Arrow's Q2 results will come in below expectations due to "deteriorating demand conditions in the global components business".
Separately, Arrow also announced an operating expense reduction plan designed to shave $130m 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.
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