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Dell says expect more than the originally announced 8,800 jobs to be cut

Dell announced earlier this week that it would close down its Austin, Texas PC manufacturing plant and laying off 900 employees in the Austin area. Dell also said at that time that it intended to cut an additional 8,800 jobs within the company in an effort to save a total of $3 billion over the next several years.

Michael Dell, CEO and Founder of Dell, said on Thursday, “We're decreasing our head count. It's declined in the past two quarters and it will decline again in the first quarter. And we will go past the 8,800 target previously discussed as we achieve everything that I'm outlining today."

The AP reports that 5,500 Dell jobs have been cut so far with 1,000 more cuts coming this quarter. However, Dell CFO Donald Carty does say that there has been an increase in frontline personnel like sales and customer support for a net reduction of 3,200 jobs so far.

Dell isn’t alone in cutting jobs; Motorola is having its own problem with profitability and too many mouths to feed. Motorola announced recently that it wanted to break into two companies in an effort to become more profitable.

Motorola announced today that it would cut an additional 2,600 jobs adding up to 10,000 jobs cut since the beginning of 2007. The reason for the job cuts is blamed in part on the poor sales of cellular phones. The layoffs are the first wave of a plan to save Motorola $500 million this year.

The Wall Street Journal quotes Motorola from a statement saying, “The work-force reductions are intended to make financial resources available for strategic business investment, while better aligning operational costs and expenses with business growth.”

Motorola is cutting jobs both abroad and at home, 354 of the jobs cut were in Plantation, Florida where handsets for use on WiMax networks were in development. The sad state of WiMax in the U.S. with Sprint continually postponing its Xohm rollout likely had an effect on those cuts.



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Here's an idea
By FITCamaro on 4/4/2008 3:51:01 PM , Rating: 5
1) Release some innovative and quality products. Motorola more on the innovative side but Dell on both.

2) As long as you're making a profit, you shouldn't be cutting jobs. Especially if you're raising executives salaries. What does that do?
a) Make you look like the money, grubbing corporations everyone talks about.
b) Create less people who can buy your products.

I love it how it has become expected that a companies profits should go up every year. And if they aren't, then they must be not doing something right or have too many employees. People wonder why the average engineer will change jobs almost(or more than) 10 times in their career. Because companies are constantly cutting jobs.

That's why I'm pretty happy with my company. We lost some major bids for work but our management's focus is on not laying anyone off. Nor have they. They just do what they have to do to get work in the building. Granted this is for full time employees. Contractors come and go as needed. But the majority of the people here are full-time.




RE: Here's an idea
By fic2 on 4/4/2008 3:57:11 PM , Rating: 2
I have to agree with you on the innovative products. Motorola cell phones - they produced the killer product in the Razr but since then they have only done different colors of the Razr and now a Razr2. Big deal. They don't even really have a phone with a built-in keyboard which is needed since all the teens do is text.


RE: Here's an idea
By HaZaRd2K6 on 4/4/2008 4:02:59 PM , Rating: 2
quote:
They don't even really have a phone with a built-in keyboard


What about the Moto Q? http://tinyurl.com/63gzvm

Personally, I've got a KRZR and I love it. It's much slimmer than both the RAZR and the RAZR2, but it does everything those phones can do. Motorola's 4LTR series has a lot of nice phones, actually. The SLVR, RAZR, KRZR and PEBL are/were all big sellers here in Canada.


RE: Here's an idea
By sprockkets on 4/4/2008 8:17:52 PM , Rating: 2
If they came out with a 3G A1200 aka MING, I would buy it. But nothing recently perks my interest with Motorola. Oh well.


RE: Here's an idea
By aebiv on 4/8/2008 5:21:41 PM , Rating: 2
I love my Q9h, and the KRZR served me very well. Motorola has good products, just like the RAZR2 has a lot of power behind it. What I see being the problem is, sales staff at AT&T being highly uneducated and Motorola not making all the tools and abilities of their phone understood to everyone.

Just like the little gal I bought my Tilt/HTC Kaiser from. She swore up and down that the iPhone did everything the Tilt did, and did it better.

Motorola suffers from not being risky enough with new product design, and being far to conservative in marketing.


RE: Here's an idea
By HaZaRd2K6 on 4/4/2008 3:59:38 PM , Rating: 5
quote:
I love it how it has become expected that a companies profits should go up every year.


It's that way because a publicly-traded corporation's only goal is to maximize profit. If they can't do that then they aren't achieving what their shareholders demand of them.


RE: Here's an idea
By dever on 4/4/2008 4:13:26 PM , Rating: 4
And I can't see any reason why there should be any other explicit goals. They're not running a daycare.

In FITCamaro's example, his employer makes an effort not to layoff employees. That is a BUSINESS decision, just as laying off employees is a BUSINESS decision. There is no moral component... and neither should there be a moral component. If your employer keeps you employed at the cost of making the company unprofitable they are doing everyone a disservice... including you... because everyone will lose their jobs, not just a few.

How can I say this... IT'S JUST BUSINESS!


RE: Here's an idea
By Master Kenobi (blog) on 4/4/2008 4:19:20 PM , Rating: 1
Not really. You can cut 10% of your head count each year and use those empty slots to bring in new people. This way you can constantly cycle out the losers and try to get lucky during the hiring cycle and find a few winners.

BTW, CEO's need a pay cut. If their pay is going up while the company is going down, there is a problem.


RE: Here's an idea
By therealnickdanger on 4/4/2008 4:45:18 PM , Rating: 2
However, by cutting employees, the company continues to "go up" as well as their salaries, so they - and their stockholders - win.


RE: Here's an idea
By SlyNine on 4/5/2008 12:03:59 AM , Rating: 2
The economy losses as less people with jobs means less people buying product, witch is a large part if this downward spiraling economy. Funny how every one misses THAT component.


RE: Here's an idea
By rsmech on 4/5/2008 2:49:55 PM , Rating: 2
So your suggestion is that if they just kept these 8,000 to 10,000 employees & even hire more that will fix everything? All companies need to increase their workforce by 10% or more & everything will be fine. So the secret to a successful business is he who hires the most employees wins, (makes the most profits.)

I think the consumer went before these layoffs started. If everyones worried about a slowing economy it's not in the corporations hands, it's in the consumers. They are the golden egg. It's the consumers who are telling the corporations we aren't buying your product or services yet because the news says it's bad out there. If you want to see who's impacting the economy just look in the mirror & stop listening to the self perpetuation doom & gloom on the news.


RE: Here's an idea
By SlyNine on 4/5/2008 10:08:35 PM , Rating: 1
Less people with jobs means less people buying goods, less people buying goods means more companies with more layoffs.

And yes I firmly believe that if we had more higher paying jobs that would HELP the economy, what do you think this stupid stimulus plan is for. Its too put money in peoples hands.

You think the consumer stopped buying before the layoffs started, interesting theory, I think you're wrong. I think out sourcing was a big part of what started this, and the fact that companies think they need to incress their bottum line each year. Unless you believe that a company can grow to infinity then their is a problem.


RE: Here's an idea
By rsmech on 4/6/2008 5:18:50 PM , Rating: 2
quote:
You think the consumer stopped buying before the layoffs started, interesting theory, I think you're wrong.


I will guarantee that is the case especially in housing. Why do you think there is an inventory of unsold homes? Nobody wanted to believe it so they kept building. The companies kept at it, it was the consumers who quit first. Look into it before discrediting it. The housing market is begging for consumers, we never left, we never slowed until it was too late, the consumer left us because of the tragedy news reports. They created a self fulfilling prophecy.


RE: Here's an idea
By SlyNine on 4/6/2008 8:52:56 PM , Rating: 1
Why did the consumer quite buying homes, because these banks were giving out loans people could never pay off. As soon as people were in to much debt they could no longer get more loans. Then we begin the circle. A few lost their jobs, they foreclosed causing the worth of a home to drop and since banks were loosing money they upped interest rates and made it harder to get loans, since people were already in debt they couldn't get loans. Houses continue to drop and people continue to not be able to afford them.

A lot of what wrong with this society is the debt of the average man. Loosing your job will not help that. BTW I didn't discredit what you said, The forces that drive the economy are pretty complex and tied together in ways its hard to tell what comes first. Like the chicken and the egg.

But it's likely to get worse before it gets better.


RE: Here's an idea
By dever on 4/7/2008 3:13:08 PM , Rating: 2
SlyNine, you're arguing against well established Supply and Demand. Do you really expect companies to increase supply in the face of decreased demand?


RE: Here's an idea
By SlyNine on 4/8/2008 1:13:40 AM , Rating: 2
You cannot have supply if their is no demand. You cannot have demand if their is no consumer. You cannot have a consumer with out jobs or loans. You are seriously trying to argue against that ??


RE: Here's an idea
By BansheeX on 4/5/2008 4:08:47 PM , Rating: 2
You assume wrongly that the people losing their job are not going to find another and shift to an area where the production is needed. Funny how everyone misses that integral component of a free market.

The only thing to screw it up is people like you getting government to interfere under the pretense of helping, leading to legislation which introduces privileges, destroying small business competition and incentivizing outsourcing and monopolistic behavior: corporate tax breaks, special subsidies using taxpayer money, managed trade agreements like NAFTA, bank bailouts, no-bid contracts, on and on and on. So instead of natural supply and demand, you have companies paying top dollar lobbying politicians, who upon getting elected, are obliged to do this crap for them in return. That's not a truly free market, that's massive socialist intervention and Republican and Democrat motivational speakers alike are fooling the crapsauce out of you. Wake up.


RE: Here's an idea
By SlyNine on 4/5/2008 10:25:28 PM , Rating: 1
A totally free market doesn't exist either and you are fooling yourself if you think it would be better, It would be total anarchy. Fact is we need some regulation. Just how much and the correct balance I do not know, But we are not there.

Im assuming wrongly that these people are not going to find another job that pays them AS MUCH as they currently are? really where's the proof on that. And as far as lobbing these politicians did you know that they put a lock out so UPRR employees couldn't even strike, oh seems fair enough when they stomp on the workers rights doesn't it.

How would you consider Nafta (cafta), Bank Bailouts, No-Bidcontracts and anything of the such something I'm pulling for, Im about helping the workers in the USA not about making it easier to shift labor to countries we cannot control the labor. If we cannot control their labor how can we make sure we have a fair competition with American workers. No I'm against anything that makes it cheaper to leave this country and get cheap/slave labor somwhere else with no regulation at all. You can bring up these bad things that have nothing to do with what I'm saying to try and make my 2 cents sound like crap if you want I guess.


RE: Here's an idea
By ghost101 on 4/6/2008 6:57:32 AM , Rating: 2
Whats your plan on stopping outsourcing or hiring foreign labour? Ban companies from doing so? Import tariffs? Minimum wages? Anti-immigration policies?

I suggest you look at why the USA is the economic powerhouse of the world. Then reconsider everything you've said.


RE: Here's an idea
By SlyNine on 4/6/2008 8:55:16 PM , Rating: 2
Yea out sourcing and hiring foreign labor has been such a god send for us hasn't it... Sarcasm alert. Our ability to manufacture and produce products and sell them is what made us an economic powerhouse, we are loosing that and we are loosing our economic powerhouse.


RE: Here's an idea
By dever on 4/7/2008 3:19:28 PM , Rating: 2
Your so-called "ability" to produce... was born of the freedom to produce. We've slowly ratcheted up the regulations, restrictions and corporate favoratism by government, crippling the natural "ability" of the free market to produce. The US became the greates because it started as the most Free. Now many in this country want to revert to authoritarian control of business/industry (which is actually just authoritarian control of the collections of individuals voluntarily cooperating to produce goods or services)... and all in the name of "progress."


RE: Here's an idea
By SlyNine on 4/8/2008 1:17:30 AM , Rating: 2
So you are saying the great depression was caused because government regulated big business? If you want to play the blame game on the government and ignore all the other factors that effect the market then be my guess.

We were in a growing economy then, what killed it is massive loans to people that could not pay them off. Now we are suffering the after effects.


RE: Here's an idea
By blwest on 4/5/2008 10:19:17 PM , Rating: 2
I hope your company cuts you, that way you can have even more time to post on DT.


RE: Here's an idea
By ghost101 on 4/6/2008 7:25:46 AM , Rating: 2
CEO wages are determined by labour market fundamentals. Supply and Demand. Good CEOs are in very short supply.

Health of the company is secondary to this. CEO performance also isnt entirely about in which direction a firm is going. A CEO which directs a company to lose 10% of its MCAP while the sector loses 20% on average is clearly a good one and needs to be rewarded in order to keep him at the firm.


RE: Here's an idea
By TALENT on 4/4/2008 10:44:17 PM , Rating: 2
quote:
How can I say this... IT'S JUST BUSINESS!


Yeah until it's you. People are much more important than business.


RE: Here's an idea
By Oakley516 on 4/5/2008 1:35:35 AM , Rating: 2
Obviously, the employees at Dell are part of the problem with that company. Whether they are overpaid, or just inefficient workers, they aren't doing as good of a job as the employees at Dell's competitors.

So they have to go.


RE: Here's an idea
By SlyNine on 4/5/2008 2:09:44 AM , Rating: 2
Sounds like speculation to me.


RE: Here's an idea
By FITCamaro on 4/5/2008 5:43:46 PM , Rating: 2
To me businesses need to be run with a moral component. Otherwise they will go to any length to make money.....kind of like they're doing....funny isn't it. Sweat shops, paying pennies an hour in 3rd world countries, etc. All because most companies no longer have morals.

There's nothing wrong with wanting to maximize your profit share. But if its done by screwing over those who helped make it possible, thats not right. You should reward those who work hard for you with some loyalty. Not cut them the second your stock slips 10 cents and you need to get it back up.


RE: Here's an idea
By ghost101 on 4/6/2008 7:03:04 AM , Rating: 2
As mentioned by other people, companies simply give what the consumer wants. If foreign and international laws allow cheap labour overseas and the consumer doesnt object, why is it wrong? Why should people listen to you? If you wish to change things like this, then engage in what you believe to be ethical consumption. Only then will firms change. Firms act within the law to satisfy consumers. So only 2 things can change, consumer wishes or the regulations. Again, i want to know what regulations can be put in place without damaging the economy.


RE: Here's an idea
By AmyM on 4/5/2008 12:01:28 AM , Rating: 3
Or as my Strategic Business Professor would say:

"A public company's sole purpose is to maximize shareholder wealth and nothing else"


RE: Here's an idea
By eye smite on 4/4/08, Rating: 0
RE: Here's an idea
By AmyM on 4/5/2008 10:16:34 AM , Rating: 5
quote:
This is a trend that's been getting worse and worse for the last 10 years. Until the execs in charge of companies right now get replaced or die off, I don't think this lust for greed is going to end anytime soon.

So would you turn down a job that paid more for a similar job that paid less?

This concept that you refer to as “lust for greed” is known as the free market, and it has been around for a lot longer than 10 years. Furthermore, unless our society becomes a Socialist State, this will continue when the current crop of “execs” are “replaced” or “die”. The purpose of a company is not to provide jobs but to maximize shareholder wealth. Jobs are nothing more than a resource necessary for a company to operate.


RE: Here's an idea
By SlyNine on 4/5/2008 1:17:35 PM , Rating: 1
Why can't we have a free market where the people at top realize their "free market" has its limitations. If they abuse it, it will fail. Right now they are abusing the hell out of it. Taking advantage of it anyway possible.

This economy runs on consumer demand, without the consumer their is no economy. I don't think we need to go completely socialized or anything, But some small steps to maintain balance in our economy would be nice.


RE: Here's an idea
By rsmech on 4/5/2008 2:59:50 PM , Rating: 3
If they are abusing it the gov't & share holders will take care of it. There is already a system in place.

There are always those who abuse the system, it's not unlike the rest of life. Just look at robbery, murder, rape, ect. I think if you are looking for gov't to fix something maybe they should start on some of these other issues first.


RE: Here's an idea
By SlyNine on 4/5/2008 10:31:14 PM , Rating: 1
Start on issues that can make or break our economy, cause stress and lead people to robbery and murder, oh and their is already a system in place for that too.

Face it the Share Holders don't give a dam if these companies are abusing the system, and when I say that I don't mean in an illegal way. As with anything that's free, If people don't use it responsibly people will step in and make changes. Its been happening for the last 300 years in our country.


RE: Here's an idea
By ghost101 on 4/6/2008 7:04:12 AM , Rating: 2
What abuse?


RE: Here's an idea
By SlyNine on 4/6/2008 8:58:47 PM , Rating: 2
They take advantage of the situation to such extremes they really don't care who's shoes they step on to make a penny unless they get in trouble. That's abuse in my eyes.

But no your right this country's economy is doing great and people have less debt then ever.


RE: Here's an idea
By ghost101 on 4/8/2008 1:11:22 AM , Rating: 2
Nice obscure answer.

I could use that exact same sentence to criticise any business, government, country or institution in the world.


RE: Here's an idea
By SlyNine on 4/8/2008 1:20:04 AM , Rating: 2
Good thing I was pointing at a broad spectrum then eh. You are correct we try to abuse most things, However things do tend too improve over time much to the dismay of the people in power, Change is never good for them. Unless you want to argue Rome was better for the common man then the USA.


RE: Here's an idea
By ghost101 on 4/8/2008 9:09:11 AM , Rating: 2
My point is that, you gave a politician's answer. So once again, i'll ask, what abuse do you see? Who's stepping on who's feet? Give me some examples of abuse that you talk of relevant to the subject matter.

SlyNine, you just spew rhetoric with little knowledge of the underlying reasons for the current economic climate. You also argue with very circular logic.


RE: Here's an idea
By spluurfg on 4/4/2008 7:41:12 PM , Rating: 2
quote:
I love it how it has become expected that a companies profits should go up every year. And if they aren't, then they must be not doing something right or have too many employees. People wonder why the average engineer will change jobs almost(or more than) 10 times in their career. Because companies are constantly cutting jobs.


If you are referring to this expectation in terms of the share price, then the share price is valued as the discounted cash flow of expected dividends. Many stocks also have a built in expectation of increased profits in the future (and thus increased expected future dividends). When earnings growth slows, obviously this expectation goes away, causing the share price to become depressed. We call this speculation.

Believe it or not, the pay of senior management is typically determined by the board of directors, who are typically selected by vote of the shareholders. Restructuring plans will also not get very far without shareholder support. So blame the shareholders -- the people who own the company -- who want higher returns and think that paying a lot for senior managers and cutting costs is the way to achieve this.


RE: Here's an idea
By elgoliath on 4/7/2008 1:40:40 PM , Rating: 1
Correction, blame the shareholders that hold enough shares that they are able to vote in board members. If you don't own enough shares, you can't vote.

Interestingly you seem to gloss over the fact that the CEO's are appointed by boards comprised of wealthy friends. So, you have a board made up of friends, all of whom are in the upper echelon of wealth dispersement appointing another wealthy friend as CEO and approving a huge salary and bonuses NOT tied to how the company performs.

So yeah, lets blame the 'shareholders' for the acts of the few and their buddies that they put in power.

In my opinion, any company that does not have a 'moral' conscience is doomed to failure- the question I have is if we are going to let the failure be the end of our society or just the failure of the individual company. All those arguing for the government to get out of the free market are either in a position to be the ones in power after every thing collapses or are people in love with what others in power tell them and don't realize that a completely 'free' market will end in anarchy resulting in an even greater imbalance between the have's and the have not's.


RE: Here's an idea
By spluurfg on 4/9/2008 9:43:43 AM , Rating: 2
quote:
Correction, blame the shareholders that hold enough shares that they are able to vote in board members. If you don't own enough shares, you can't vote.

Interestingly you seem to gloss over the fact that the CEO's are appointed by boards comprised of wealthy friends.


Uh... If we're talking about a common stock in say, a US company, one share grants you one vote. Now if you own very few shares and somebody else holds very many shares, then yes, he will have much more influence over the composition of the board members which are, I repeat, elected by shareholder vote.

If these board members have a habit of selecting incompetent CEO's that happen to be their personal friends, then I suggest that the shareholders sack said board members. To learn more about this system I recommend a finance and management 101 course or a similar business principles/management book.


RE: Here's an idea
By elgoliath on 4/10/2008 3:42:29 PM , Rating: 2
Oh yes, I'll be sure to take that class- that was such an original jab (how long did it take you to come up with that one?). Reading my post again, vote should have been nominate, but I wouldn't expect someone as knowledgeable as you to catch that.

Regardless, even tho I used the wrong word, it doesn't matter as it amounts to the same thing. If you can only vote on nominations by the people/groups that hold enough shares to actually be able to nominate, then you are just choosing between a turd and a douche bag. These same douche bags and turds don't even have to be voted in by a majority which allows management to stack the boards.

The current system is far far far from perfect. Are you arguing against making it better or just jumping on the wrong use of a word even tho the context clues were enough to figure out what I was talking about?

A quick google search turned up this guy who seems to hold a similar view:
http://articles.moneycentral.msn.com/Investing/Com...


RE: Here's an idea
By spluurfg on 4/11/2008 4:33:11 AM , Rating: 2
Actually I wholeheartedly agree that the current system is far from perfect -- all I am trying to say is that shareholder antipathy is as much to blame for weak corporate governance as the system itself. Look at how much can be accomplished by strong shareholder activists like Flowers or Hohn -- whether they are helping or hurting time till tell, but it sure shakes up stagnant managers and board members. If only all minority shareholders were as interested in their ownings...


RE: Here's an idea
By spluurfg on 4/11/2008 4:38:34 AM , Rating: 2
And sorry about the jab -- I didn't really mean it that way... there are just a lot of people on DT who honestly don't know about this stuff. You're absolutely right that if there's a very fragmented shareholder base then a group of larger minority shareholders will have much more power when nominating. It's like the two party political system in the US.


RE: Here's an idea
By elgoliath on 4/11/2008 1:58:55 PM , Rating: 2
I apologize for my reaction, I wasn't in a good mood yesterday and it seems anytime someone makes an honest mistake the first response from some posters is to take a class/read this book etc. because you obviously don't know as much as they do.

Part of the problem is the same problem with capitalism in general- he who has the gold makes the rules, and they tend to only make rules that help them. I look forward to some of the reform that is being talked about so we can get some of the power back to the average citizen.

Overall though, most companies seem to be doing a good job with keeping things in check, but we only ever hear about the boards and CEO's that are outrageous, like the one agreement for the CEO to be paid for 5 years after his death (how else does crap like that get approved unless the board IS made up of cronies of the CEO?). Unfortunately, the worst offenders also seem to be the biggest companies with the most 'gold' so they make, err, their lobbyists make the rules/laws. I hope that type of stuff gets reformed to- they should have to go through their local representative just like everyone else imo.


RE: Here's an idea
By spluurfg on 4/14/2008 9:38:03 AM , Rating: 2
Not at all -- I should have worded my post more constructively.

I think shareholder activism is starting to take sway in a few examples, but so far it's been driven largely by hedge funds and private equity groups like Steel Partners in Japan or TCI in the case of CSX. The trouble is that a lot of personal and institutional investors see equity as a way to get a nice return and gain exposure to the public markets, with little intention of actively managing it -- they assume the board and management will take care of things, drive reforms and operational improvements, etc. Plus, they are too resourced strapped to function as an active investor.

This antipathy allows the sort of cronyism we tend to see these days, with massive salary packages and golden parachutes that never should have been negotiated in the first place. There's been a bit of attention drawn to this -- like Rob Nardelli who got an insane $210m golden parachute from Home Depot even though the company was suffering got appointed to be CEO of Chrysler. However, this time Cerberus, the PE group who bought Chrysler, is giving him a mostly performance based salary.

Erm, so point of ramble is that there's this big divide between how CEO's are compensated and treated in public companies and private companies -- private equity groups and hedge funds tend to drive their managers with performance based pay, and to ruffle up underperforming public companies' boards with threat of removal. This is because PE groups and hedge funds know that this is a way to drive performance and increase returns.

Public companies tend to putter along, with investors not really having the mindset that they are the stock-holding owners of the company and should be driving change in order to maximize their return, but letting the larger minority shareholders vote in their friends. It's the equivalent of not voting because you think one vote won't make a difference.


"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer














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