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Michael Dell, Dell’s chairman and CEO.  (Source: Dell)
Dell takes steps to save $3B USD over the next three years

Dell is continuing its efforts to cut costs and an Austin, TX desktop manufacturing plant looks to be the latest victim. As is the case with many U.S.-based companies these days, Dell will cut jobs and rely even more on overseas manufacturing "to restore the competitive advantage of the company’s operating model."

The Austin plant closure is a part of a five-point Dell growth plan which will focus on global consumer, enterprise, notebooks, small and medium enterprise and emerging countries. By removing the Austin plant from its portfolio, Dell hopes to make a sizeable dent in the $3B in savings that it hopes to realize over the next three years.

"We believe we have a $3 billion opportunity to drive both productivity and efficiency," said Dell CEO Michael Dell. "We’ve analyzed 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."

Dell's insistence on reaching thing $3B figure will also come at the expense of 8,800 jobs. This is in addition to the 3,200 employees that were removed from the mix during fiscal 2008 -- 900 of which came as a result of a Canadian call center closure.

Other cost-saving measures that Dell has already taken include the closing of its 140 Dell Direct Store kiosks across the U.S. To make up for the loss of the kiosks, Dell expanded its presence in big box retailers like Wal-Mart and Staples.

"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," added Dell CFO Don Carty.

Despite the outsourcing and layoffs, Dell is moving along quite swiftly with product development. The company recently leaked its future notebook plans including the Latitude XT2 tablet and the Latitude E4200 and E4300 notebooks. The company also revealed a new, low-cost Blu-ray option for the Inspiron 1525 notebook.



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RE: April Fools?
By JustTom on 4/1/2008 11:17:27 AM , Rating: 3
All leading economists? Hardly. All economists wouldn't agree on the color of the sky.

Do you even know what a recession is? Or a depression? Perhaps you should ask your fiance.

There has not been one quarter of negative growth let alone 2, and there certainly is not high unemployment or falling prices.

We are certainly in an economic downturn, which probably will lead to a recession but the chances of entering a depression are rather slim.


RE: April Fools?
By OxBow on 4/1/2008 11:55:03 AM , Rating: 2
It's obvious that we're in a very bad recession. Granted, the numbers for last quarter aren't out yet, but every measurement they're based on has been released and they all show up dreadfully negative. Most economists are projecting this to rival the recession of the late 70s, which I doubt many of you can remember.

Austin is going to have it bad with this. Although most of Texas was better insulated from the housing bubble, Austin was not, so they're already hurting. Drop 8,800 unemployed on the town (just about 1% of their permanent population) and it doesn't bode well at all.

There's no doubt a that you'll be seeing a whole lot of blues on Austin City Limits.


RE: April Fools?
By JustTom on 4/1/2008 1:42:45 PM , Rating: 2
``We are in a very sluggish economy that's barely growing at all, but it is not in a deep recession,'' said David Resler, chief economist at Nomura Securities International Inc. in New York. ``It looks nothing like a free-fall environment.''
Stern's View

``It's clear the economy is growing little if at all,'' Fed Bank of Minneapolis President Gary Stern said after a speech at the European Economics and Financial Centre in London on March 27. ``The consensus is that it could improve in the second half. But if headwinds pick up, it could be more subdued than that.''

I lived through the recession of the late 70's, and what is going on has little resemblance to then. In 1979 the misery index – inflation + unemployment stood at 17.07, in 1980 it was 20.76, and in 1981 it was 17.97; the index today stands at 8.83.


RE: April Fools?
By bpurkapi on 4/1/2008 2:39:40 PM , Rating: 2
There are definitely falling prices. Recently a news story was run on the willingness of big box stores to negotiate prices. I don't think we are that bad off, but certain sectors are freaking out. What worries me is the future of our economy, people have houses with less equity, cars that still chug gas, and debt up to their ears. These are all problematic. Factor in a weak dollar and rising prices for fuel, food, and education. The US economy is at a critical moment where things could easily move towards a recession. Global competition for jobs also makes getting out of a recession difficult.


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