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
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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