Dell to cut 8,800 Jobs Worldwide

Tuesday, April 1, 2008

In a bid to save as much as $3 billion over the next three years, Dell said it will shut its desktop PC manufacturing plant in Austin, Texas. The company also repeated its plans to reduce global employee headcount by at least 8,800, or about 10 percent of the work force. In the last nine months of the company’s fiscal 2008, Dell reduced its headcount by 3,200, excluding acquisitions. The Texas-based company also reiterated a goal from last May to restore the competitive advantage of the company’s operating model, rationalise its operations and improve profitability and cash flow.
“We believe we have a $3 billion opportunity to drive both productivity and efficiency,” said Michael Dell, chairman and CEO, Dell. “We’ve analysed the business and opportunity, so we know – without question – where our priorities should be. And as we’ve reignited growth in our business, we’re taking deliberate steps across the company to improve our competitive position.”The actions Dell will take during Fiscal 2009 and beyond are expected to position the company to further accelerate growth in its five focus areas: global consumer, enterprise, notebooks, small and medium enterprise and emerging countries, while improving profitability and cash returns.In addition, the company will take further actions to reduce total product costs across all areas, including design, manufacturing and logistics, materials and operating expenses. Dell expects that the initial benefits from these actions will begin to be realised in the second half of this fiscal year. “We expect that these actions, along with the continuing rigor we’re applying to operating expense control throughout our operations, will result in an improved, world-class cost structure,” said Don Carty, vice chairman and CFO, Dell.The company also announced it is undertaking a strategic assessment of ownership alternatives for its Dell Financial Services financing activities. The assessment will primarily focus on the consumer and small/medium business revolving credit financing receivables and operations in the US, but may also include commercial leasing.The outcome of the assessment will depend on the customer, capital and economic impact of alternative ownership structures. It is possible the assessment will result in no change to the ownership and/or operating structure. The company expects to complete the assessment in Q3 of the current fiscal year.

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