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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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You do it the smart way & not the easy way
By crystal clear on 4/5/2008 5:30:25 AM , Rating: 1
This from the A.P. report-

Carty also said the company plans a share repurchase of at least $1 billion this quarter after repurchasing $4 billion last quarter.

Dell in short is/has been repurchasing its own shares to the tune of $5 billion in 2Qs.

Yes their intentions are good namely protecting share/shareholder value & interest.

But Dell is doing this at the wrong time & at the expense of jobs ,the savings derived are used for the repurchase initatives.

You undertake a share repurchase in times of prosperity just like Intel is doing it right now.

"When prosperity comes, do not use all of it."

Yes you spend & also save a portion for the bad times.

The above quote is the appropriate stratergy for any company in times of prosperity.

You dont use prosperity to pay out huge bonuses to CEOs etc or buy up other companies up,rather use it the smart way.

The smart way being to spread it ,namely-

Share repurchase programs,dividends,bonuses,R&D,new products planning & introductions,cutting manufacturing cost to increase profit margins,new marketing intiatives etc etc.

Dell right now should be focused on-

Marketing & increasing its sales & intorducing new products at competititive prices.

Increasing profit margins & marketshare.

Yes cost cutting should go on at a smaller scale,with redundents employees being transferred to other duties/depts with necessary retraining programmes in place to enable such moves.

Moving jobs overseas to China/India will not solve its problems-you do it the smart way & not the easy way.

This is certainly not the right time for share repurchase.

By crystal clear on 4/5/2008 10:35:55 AM , Rating: 2
A Dell employee speaks his mind-

I think that the Dell lay offs really suck !!! I work at Dell and alot of other people do to. We all need are jobs , Dont any body care !!!!! People are losing their homes cant pay rent or buy food or pay any of their bills, The unemployment dont hardley pay any thing god knows not enought to pay a car payment , then their is you insurance, who can pay for that Cobora coverage I cant't afford to pay that, can any one elese? What about the single mothers out there??. What about all the big wigs that make all the money at Dell , Why dont they cut some of their pay to save money ??? God knows that the little people like me that work at Dell dont get that big fat pay check, Hey matter of fact I only made maybe a little over 22,00.00 last year.I have been with Dell for a while now and it looks like to me that if they would quite spending money on all stupid stuff they might have some money, Like every time you turn around they are moving yellow side rails and buying more shelving, then they have to have some one to come move all this stuff, THAT TAKES ALOT OF MONEY.If the ware house is ruuning good and the parts are going out the door at the right time and the order is right why fix things that are not broken. That is all that I have to say for now.

That reminds me an earlier post of mine on the Dell article-

Americans need jobs

Rated down to RED-How ANTI AMERICAN those who voted it down can be.

By crystal clear on 4/5/2008 10:57:36 AM , Rating: 2
U.S. employers cut 63,000 jobs in Febuary according to Labor Department data released . That followed a loss of 22,000 jobs in January. December's job growth was only half as big as the government had earlier reported.

Plus 80,000 jobs had disappeared in March.

WASHINGTON (Reuters) - Employers cut payrolls in March for a third straight month and the jobless rate jumped to a 2-1/2-year high, further evidence that a housing downturn and credit crisis may have pushed the economy into recession.

The Labor Department on Friday said nonfarm employment fell by 80,000 jobs in March, more than expected and the biggest drop in five years. Financial markets saw this as reinforcing the need for further Federal Reserve interest rate cuts.

63000+22000+80000=163000+how many more in the coming months.

By rsmech on 4/5/2008 3:07:49 PM , Rating: 2
As many as it take so the company survives to rehire them. That will be when the evening news starts improving consumer confidence & not tearing it down.

RE: You do it the smart way & not the easy way
By teckytech9 on 4/5/2008 3:41:18 PM , Rating: 1
No doubt about the need for jobs to stay in America. However, what is causing this outsourcing of jobs can be attributed to the current market conditions and state of the US economy.

Whenever outsourcing happens, a void is created where jobs have left. I don't totally blame one or two factors but a myriad of symptoms that look like things maybe getting much worse before getting any better.

US Dollar devaluation, inflation, health care costs, credit crisis, Iraq war, Fed policies, three-month T-bill rates, tax breaks to corporations, etc.

It follows the premise of Capitalism, when left unchecked, and able to flow at its "own will", may lead to unforeseen consequences. Perhaps the culprit could be massive spending of borrowed funds that is way out of control, and Corporate greed to maximize profits. The lavishness and excesses of the prior years and the lack of real savings, may also be a factor of the current economic demise.

There may be a day when our friends in Asia, and elsewhere quit lending the US any more money, and stop using their massive Sovereign Wealth funds to bail us out. Berkshire quotes from their annual shareholder letter that the US Government needs about $1.2B every four-hours to function, which is about $7.2B everyday.

What follows all reasoning is that the economy can further weaken (currency turns to confetti), or that new "Green" industries are created to employ the millions that have been displaced.

Only US jobs can save our economy, no doubt about that.

By crystal clear on 4/5/2008 5:39:39 PM , Rating: 2
I think every CEO in the USA should remind himself everyday.

The quote of the day-

Only US jobs can save our economy, no doubt about that

Great !

RE: You do it the smart way & not the easy way
By ghost101 on 4/6/2008 7:10:42 AM , Rating: 2
Please tell me how keeping US jobs at a time of an economic downturn saves the economy? Look around the world where economies have very high government employment where public employment remains fairly constant. These economies arent immune to business cycle fluctuations. Also, dont give me some money-machinesque argument of how keeping workers actually helps drive demand to increase sales.

By crystal clear on 4/6/2008 10:24:37 AM , Rating: 2
Please tell me how keeping US jobs at a time of an economic downturn saves the economy?

Employment holds the key to the U.S. economy because jobs mean paychecks, paychecks mean consumer spending, and spending accounts for about 70 percent of the economy.

Yes its not only Dell but IBM & many more companies who are in the process of restructoring & reorganizations.

That means job losses that go overseas-thats the easy way out.

The smart way would be retraining programs to get these unemployed back to jobs/working.

I am against bloated governments & inefficiencies that come with it.

Yes the economy is rapidly slipping into recession but you got to Act & not react to this.

ACT means taking the right economic measures at the right time, to stop the economy going into recession & bring it back on the growth track.

Way back in the 4Q 07 I read reports of the expected downturn on 1Q 08 & possibly recession in 2H 08.

People preferred to ignore this & carry on "business as usual".

Repeatedly I have in the past posted comments about the economic slowdown/recession.

Companies like Dell,IBM,Intel etc operate on a global basis,
so the economic downturn in the USA should NOT affect them so much.

The economic slowdown & or recession is not only bad for the USA, but also for the rest of the world-the spill over effect will hurt other major economies.

"people out of their jobs is bad for everybody"

By ghost101 on 4/8/2008 9:16:29 AM , Rating: 2
Again, you make basic mistakes. You cannot use medium to long term policies to solve a short term demand problem. Retraining unemployed wouldnt have prevented the current situation. Unemployment can be reduced if wages are reduced. However, it is a lot easier to simply employ the correct number of workers for the current level of consumer expenditure, level of technology and nominal wages.

As for a recession, yes it was mentioned a while back with a low probability butthats exactly what it is. One possible outcome and you cannot have the correct policy for all of them. predicting a recession (especially the financial bubble) is easier said than done.

By ghost101 on 4/8/2008 9:20:33 AM , Rating: 2
Employment holds the key to the U.S. economy because jobs mean paychecks, paychecks mean consumer spending, and spending accounts for about 70 percent of the economy.

Dont you appreciate how this is a money-machine? It is impossible otherwise command economies would be the best method of government. You cannot simply pay people to buy your goods.

"Vista runs on Atom ... It's just no one uses it". -- Intel CEO Paul Otellini

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