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Dell To Close Texas Plant, Cut 8,800 Jobs Worldwide
5:10 PM EDT Mon. Mar. 31, 2008
Dell had previously said it would lay-off 8,800 employees, and cut 3,200 in the last nine months of its fiscal year 2008, ending Feb. 1, 2008.
Monday's announcement comes days before Dell hosts its first meeting with analysts since 2005.
"We believe we have a $3 billion opportunity to drive both productivity and efficiency," said Michael Dell, Dell's chairman and CEO, in a statement issued by the Round Rock, Tex.-based computer manufacturer. "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 position."
The company expects the $3 billion in savings over the next three fiscal years to come from reducing production costs in areas including design, manufacturing, logistics, materials and operating expenses, the company said, and it expects to see a positive impact beginning in the second half of this fiscal year.
Dell is focusing on five markets: global consumer, enterprise, notebooks, small and medium enterprise and emerging countries.
"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," said Don Carty, Dell's vice chairman and CFO, in a statement.
Dell is also looking to assess its Dell Financial Services financing arm, taking stock of consumer and SMB revolving credit financing receivables and operations in the U.S. and possibly commercial leasing, the company said. The assessment may result in a change of ownership or operating structure, and the company expects it to be complete in the third quarter of this year.
