IT Employment

Dell axes another 900 in headcount

Dell will be closing its Austin, Texas, desktop PC manufacturing plant by January of 2009. As a result, it will lay off between 800 to 900 workers who are employed there.

Dell will be closing its Austin, Texas, desktop PC manufacturing plant by January of 2009. As a result, it will lay off between 800 to 900 workers who are employed there.

CEO Michael Dell was quoted that this represents "a $3 billion opportunity to drive both productivity and efficiency."

What he means is that the Austin plant shutdown is part of a plan to slash the said amount of expenses within three years. Already, Dell says it has eliminated 3,200 of the targeted 8,800 jobs, or about 10 percent of its work force so far. It wants to achieve the reduction within a year. The additional jobs eliminated here will now put Dell about halfway toward its goal.

Shares of Dell rose 31 cents to close at $19.92 on Nasdaq. It dropped and regained 25 cents in after-hours trading.

Michael Dell has been trying to remake Dell through various cost cutting as well as moving into new markets such as high-end consumer computers and laptops. This is amidst expanding its global footprint into China and even India.

Do you think Dell be able to topple HP from its position of the No. 1 PC manufacturer?

About

Paul Mah is a writer and blogger who lives in Singapore, where he has worked for a number of years in various capacities within the IT industry. Paul enjoys tinkering with tech gadgets, smartphones, and networking devices.

14 comments
trackpads
trackpads

Great, more american jobs go to China. Maybe they can build a factory in Tibet....

russell.foy
russell.foy

I wonder if those same 900 employees sat in a meeting a couple of years ago and were told that they were the most important assets of Dell. You hear these statements and reassurances all the time when profits are high and Wall Street gives the OK sign. Apparently, American management has no faith that employees can be re-trained or re-deployed to correct a situation. Take the easy road, cut costs, cut jobs, and loose the loyalty they originally requested from the employee. After all it's cheaper and they still look good to the sharks on Fifth Avenue. Maybe I'm too harsh, and it's only that the ASPCA requires that American CEO's and their teams are neutered.

calvin13
calvin13

Maybe Michael should cut his salary and get rid of the overseas operations that U.S. customers have to call. Cutting jobs is not a way to increase profits for the long term. For the short sighted yes. How about increasing customer satisfaction and experience. Come Dell increase those CE scores.

paulmah
paulmah

Do you think Dell be able to topple HP from its position of the No. 1 PC manufacturer?

Locrian_Lyric
Locrian_Lyric

no longer used by monks.... 200 or so, right?

Locrian_Lyric
Locrian_Lyric

when the execs call a meeting to tell everyone how important they are, update your resume and send it out.

spikevoltage
spikevoltage

Thinking about Dell vs. HP implies that treating the computer as commodity is the correct strategy for Dell. It is - and it isn't. Computers (at least those Dell sells) are continuously commoditized, so all computer manufacturers need to think of them that way. Dell, however, has built its success on excellence with the direct sales model. Leaning into that - and possibly drawing more products/services into that model - will ultimately yield greater profitability for Dell than worrying about who makes more laptops. If butting heads with HP enters into Dell's strategic planning, I'd expect their stock to tank.

alice.liau
alice.liau

I believe it does not matter whether Dell or others will topple HP or vice versa, however by doing the overhead reduction, and invest in technology, that is the smart way towards the top

CG IT
CG IT

if they had a great customer service department. They've got the lowest prices. What Dell needs is quality service to go with the lowest prices. Here's something Dell has done on their poor customer service ratings. To combat poor offshore customer service, Dell came up with a support program where consumers can sign up for US based help desk. Of course it's an added cost nonetheless, consumers can now pay for US based customer service. Not sure it'll be better technically than offshore, but at least US consumers can talk to someone they can understand.

DadsPad
DadsPad

Is he trying to outsell HP? Then he must be going into the Global Company excuse for reducing cost. You know, since it is a global economy, then we must use overseas companies where we expect to do business. Or, he might be positioning his company to be more valuable for aquisition. Severe job loss is not a sign of a healthy company. A good healthy company increases in all areas, it does not decline.

woftbo
woftbo

I have not had any reason to contact Dell support lately. I tried to contact HP support last week about a new out of the box desktop without sound. The phone # listed in their printed warranty lead to a voice msg indicating there was no voice support. Support was via chat only, fortunately the modem had installed and the chat support worked ok. Also the phone # on the desktop for tech support was incorrect and accompanied by Arabic text. HP is not on my recommended list. Gateway refused to deal directly with me as a consultant last year, they will deal only with the end client (who only knew there was a computer problem she wanted handled!). Acer has bought Gateway out since, perhaps that situation has changed? I would appreciate hearing details of support experiences - if by downsizing Dell support suffers their sales will suffer.

rentauri
rentauri

You know I have a couple end users (friends, family and the such) that use Dells and they haven't had any real problems with the support. I mean sure there is the wait times and the language issue but if I'm not mistaken that is a market thing not simply a dell thing. One of my laptops is a Dell, mainly because it is under warranty, I run it through the grinder and needed to replace the DVD drive 3 times, each time is was fast, easy and free with no hassles. I can't say the same about Gateway as one friend has one and has had nothing but problems with there CS. Of course it could simply be he was unlucky with them while I was extremely lucky but Ive never had problems with them

jishkumar
jishkumar

the after sales support from dell is awesome and the technicians or the executives are from india and they are very patient and polite and the response i get from them is amazing.

mc36
mc36

The only reason why you are saying that is because you are from india..Dell support SUCKS

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