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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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RE: Here's an idea
By HaZaRd2K6 on 4/4/2008 3:59:38 PM , Rating: 5
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 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
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
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"

"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan

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