In an internal blog posting to employees, CEO Michael Dell announced that Dell would look to cut additional costs in the fourth quarter of this year. This is in reaction to what Dell sees as a slowing global economy, the financial crisis in the United States, and less demand for its desktop, notebooks and server systems. The cuts will include asking employees to take unpaid leave, voluntary severance packages for some workers and a reduction in contract workers.
the world's second largest producer of desktops and notebooks
, is looking to
cut costs by asking employees to take an unpaid vacation and by reducing the
number of outside firms the company uses for various projects.
In an internal blog posting Nov. 3, CEO Michael
Dell told employees that the company wants to save additional dollars in the
fourth quarter of 2008 as the problems with the global economy continue and the
demand for Dell's desktops, notebooks, servers and other IT equipment slows
Earlier this year, Dell
announced a broad cost-cutting plan that will eventually save the company $3
billion during the next three years
. When Michael Dell announced that plan
in March, it involved cutting 8,800 jobs from the company's global operations.
This latest cost-cutting measure involves asking employees to take a
voluntary, nonpaid vacation of one to five days and also severance packages for
those workers who qualify. The other cuts involve reducing the number of
outside consulting firms and contractors Dell uses, as well as a global hiring
In an e-mail, a Dell
spokesperson did not offer specifics on how many workers the company wants to
eliminate with the voluntary buyout. At the end of the second quarter of 2008,
Dell had 79,300 employees worldwidee. The company plans to announce its
third-quarter financial earnings on Nov. 20.
"The proposed actions are voluntary," Jess Blackburn, a Dell spokesperson,
wrote in an e-mail to eWEEK. "We're not speculating on the level of
participation we anticipate."
During the past year, Dell
has been upfront about its concerns about the ongoing financial crisis in the
United States and the impact that has had on IT spending
, especially when
it comes to hardware purchases. In addition to the United
States, Michael Dell has expressed concerns
about the company's business in Asia and Europe.
"When Dell announced [second-quarter] financial results on Aug. 28, 2008, it reported
continued conservatism in IT spending in the U.S.,
which had extended into Western Europe and several
countries in Asia. The company is seeing further
softening in global end-user demand in the current quarter," according to a
statement Dell released on Sept. 16.
Michael Dell returned to the CEO position in 2006
, he has looked to
reinvigorate his namesake company as it faces increasing pressure not only from
but from a number of other PC vendors, such as Acer, which has seen its sales
of notebooks skyrocket in the last two years.
When Michael Dell announced the company's cost-savings plan earlier this
year, he also said the company would focus on five key areas as it looks to
increase it market share: the global consumer market, enterprise businesses,
notebooks, small and midsize businesses, and the emerging market.