Gateway ( GTW) is laying off about one third of its workforce as part of an ongoing restructuring process, the company said at a Morgan Stanley semiconductor conference late Monday.

CFO Rod Sherwood said the company plans to cut its payroll to the mid-5,000 level, down from about 7,400 as of the end of 2003, according to a report in Dow Jones.

Most of the jobs lost will be in back-end service and support functions like logistics and shipping. Bob Sherbin, a Gateway spokesperson, said the company is already about halfway through the workforce reduction. Gateway currently has a staff of about 6,500.

Sherbin said the layoff follows restructuring measures outlined in the third quarter of 2003, but that this is the first time Gateway has outlined the size of the staff reduction. He said the move is not related to Gateway's recent acquisition of white-box computer maker eMachines.

Though Gateway was the first PC maker to make a major strategic push into the hot consumer market, the shift has proven insufficient to lift its persistently weak financial results. In January, when virtually all of its peers were about to report strong fourth quarters, Gateway disappointed Wall Street by warning it would deliver sales well below its guidance .

In recent trading, Gateway shares were up 2 cents, or 0.3%, to $5.83.