The Canadianization of Merisel continues. The El Segundo, Calif.-based distributor has announced that it is laying off 400 workers and its president and COO James Illson is resigning.

This is all thanks to a few pesky Canucks and a new, continent-wide organization. Merisel is attempting to apply its successful Canadian strategy, and its Canadian upper management team to the company's entire North American operation.

"The decision was to combine our U.S. and Canadian distribution businesses into a truly North American distribution business to be led by Ron Smith, who was president of Merisel Canada and now will be president of North American distribution," says Merisel chairman and CEO Dwight Steffensen. He adds that much of Smith's Toronto-based executive team will work with him to help orchestrate the new Merisel.

This unification will lead to layoffs, since many positions are now being performed by separate people for the American and Canadian markets. "It really revolves around reduction of duplication now that we are a North America wide company," says Steffensen.

He hinted that people this side of the border are less likely to be affected by the layoffs.

"We are adopting pretty much the Canadian model, so that in effect the impact on Canada is relatively small," Steffensen says. "The majority of change will be in terms of the adoption of the Canadian model as we approach the customers, and as we deal with our vendors and our marketing partners in the U.S."

According to Steffensen, the shakeup at Merisel shifted the role of president from an operating one to a strategic one. This left Illson performing duties that he didn't find as interesting or rewarding as his three years at the helm of the company's American operation. Merisel says it has no plans to replace him and resurrect the president and COO role.

Steffensen says the changes will have only minor effects on Canada at this point.

Steve McHale, senior channel analyst with Framingham, Mass.-based International Data Corp., says Merisel's actions were inevitable. "What they're doing is rationalizing the size of the business to tune it better to profitability," he says. "I don't know exactly how it's going to effect the channel overall, except that they're doing something that Ingram Micro has already done and that I think will happen to any distributor that's running the same kind of model."

But, McHale warns, "(Merisel) plays in different markets here . . . I don't know if they're going to be able to successfully export that to the U.S."

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