Personal computer maker Gateway - caught up in a massive retrenchment brought on by a fierce, industrywide price war - said last night that it will cut about 25 per cent of its worldwide work force, take a $475 million (432 million) third-quarter charge, and close operations around the Pacific Rim and possibly Europe.

Earlier this month the company said it would shut down its Dublin operations, which was its European headquarters, with the loss of 900 jobs.

The company also pulled out of its operations in Britain, earlier this month with the loss of a further 300 jobs.

Gateway, embroiled in a price war led by rival Dell Computer said it was shutting its company-owned operations in Japan, Australia, Malaysia, New Zealand, and Singapore.

It said the third-quarter charges include about $200 million for the possible total exit from Europe.

With the possible European exit, the job cuts would total about 4,600 out of its worldwide work force of about 19,000, a company spokeswoman said. Excluding Europe, the cuts would total about 3,500, she said.

Gateway, ranked fourth leading computer maker in the US market also indicated that its results for the rest of the year would be roughly in line with analysts' expectations.

The shares of the company, which had closed up 10 cents, or more than 1 per cent, at $8.60 on the New York Stock Exchange, rose to $9 in after-hours trading.

The stock has underperformed the American Stock Exchange computer hardware index by 34 per cent this year. Shares fell steeply in mid-July, when the company reported a second-quarter loss and executives said they saw no quick turnaround.

The PC-maker said it was cutting about 15 per cent of its US workforce and would close call centres in Hampton, Virginia; Vermillion, South Dakota; Salt Lake City; and Lake Forest, California. Gateway said it expected to report a slight third-quarter loss on a pre-tax income basis, excluding special charges, while returning to profitability on a pre-tax income basis for the fourth quarter.

The company said it expected to be marginally profitable for the entire second half of 2001, and expected its restructuring moves to save it about $300 million in costs and expenses annually.

"Their cost structure is completely out of alignment, and remains so even after this restructuring," said one analyst.

The company said it was organising itself along six lines of business - hardware, communications, applications, learning, financing, and services.