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.
quote: Please tell me how keeping US jobs at a time of an economic downturn saves the economy?
quote: 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.