Dell is planning to close its Winston-Salem, N.C., manufacturing plant as part of its ongoing effort to cut costs and save money. The closing is expected to impact nearly 905 employees by the time Dell's desktop manufacturing facility closes in January 2010.
Dell is closing its North Carolina manufacturing
facility by January 2010, which will eliminate 905 jobs as the PC maker looks
to cut costs and save additional dollars through streamlining its operations.
On Oct. 7, Dell announced that the Winston-Salem,
N.C., plant, which makes desktop PCs, is slated to close by January. By
November, Dell plans to eliminate 600 plant employees and all 900 laid-off
workers are eligible for severance pay, benefits continuation and outplacement
services.
"This
is a difficult decision, especially for our North Carolina colleagues, but a
necessary one for Dell customers and our company," according to a Dell statement.
In March,
Dell
announced a first round of layoffs for the year and many of the same cuts
came from the North Carolina plant.
Dell has about 78,900 employees worldwide.
When the North Carolina plant closes, Dell will then
have three company-owned plants in the United States - Miami, Nashville and
Austin - along with six others located throughout the world. Earlier this year,
Dell announced that it plans to move its Irish manufacturing business to Poland
and the sale of its Tennessee remanufacturing operation.
Dell is in the middle of a multibillion dollar cost-cutting program
that looks to save the PC maker about $4 billion. The program
comes at a time when Dell, which remains the world's No. 2 maker of
PCs, is
struggling against both Hewlett-Packard and smaller companies such as
Acer and
Toshiba, which continue to make inroads in the United States, where
Dell's PC
brand remains strong.
The recession in the United States, as well as less
consumer and business spending worldwide, has also impacted Dell's once-healthy
PC business. In August,
the
company announced second-quarter net revenues of $12.8 billion, which were
down about 21 percent compared to the $16.4 billion of the previous year.
In June,
a
Gartner report found that PC shipments were expected to decline about 6
percent this year compared to 2008, which does not help Dell or its rivals. It
should also come as no surprise that Dell closed a plant that produced desktop
PCs. The same Gartner report found that desktop shipments are expected to
decline nearly 16 percent this year.
With these trends in mind, Dell is looking to change
the company in several ways. CEO Michael Dell has emphasized several areas
where the company is looking to expand. One area is laptops and more consumer
devices. At the same time, Dell is looking to transform the company into more
of an IT services provider.
In September,
Dell announced that it would buy Perot
Systems for more than $3 billion.
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