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MacMall Layoffs Caused By New Distribution Model

Yesterday we reported that Creative Computers Inc., which houses MacMall, cut 45 individuals from its workforce on August 11th. Since then, sources have presented us with some additional information that paints a clearer picture of the company's moves, and reveals some of the reasoning behind these changes.

According to one source, the sole reason behind the layoffs stems from the fact that Creative Computers is in the midst of moving to a brand new business and distribution model. As part of this new strategy, the company will be doing away with its warehouse and moving to a model in which all orders will be shipped directly from Ingram Micro, a national distributor.

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From: Scott Klein
Sent: Wednesday, August 11, 1999 11:54:34 AM
To: * HQ All
Subject: Important Changes


Fellow Employees,

As I stated in my letter to everyone back on the 24th of July, it is critical that we reduce expenses in order to improve profitability. With this in mind, we took a major step forward today in our effort to build our company into the powerhouse it will soon become, by adjusting the size of our team. While it is never easy to say good-bye to friends and colleagues, sometimes it is a critical element that is needed to insure that the rest of the organization flourishes. I know you all join me in wishing all of these people the best success in whatever direction their careers take them.

In that same letter I talked about the importance of sales and customer service to our organization, since without customers who honor us with their purchases, we have no value or purpose. In order to give our valuable salespeople the best possible chance of selling more, we have reorganized certain support functions so that they can be better equipped to meet the challenges of today's marketplace. Critical elements of this plan include the fact that it is based on trust and giving people more direct control over their areas of responsibility as well as the accountability that goes along with this. I also told everyone how important I felt training was to our company. Our new structure has been designed to provide everyone with meaningful growth opportunities.

Change is never easy; in fact, it is very uncomfortable. However, I know that you will all agree that most things in life that are good, require at least some level of discomfort before the good part kicks in. In the weeks ahead, I am sure we will all feel some anxiety over the actions that have taken place today. However, I am confident, that it won't be too long before we will all experience the improvement in our results that we are all looking for. If you have any questions, feel free to contact me directly.

For now I am going to ask each of you to help by doing more than you used to do. You are still with us because we believe that you are the people with the most skill, drive and desire and that you will all do whatever is needed to maximize our results. We can make great things happen by working together. Let's do it!


As a direct result, the Company's purchasing division is said to have been totally demolished. Many of those who were let go received raises and promotions in the prior weeks as a way of compensating them for their loss — thus enabling them to receive a higher paying salary at their next place of work.

An e-mail message sent out to employees on the day of the job cuts can be read, in full, above.