Dell Trims 3,200 Jobs in 8 Months
Dell has trimmed 3,200 employees from its payroll in the last eight months as part of its effort to return to profitability by streamlining its operations and cutting costs.
The company announced the job cuts when it disclosed its 2008 fiscal fourth-quarter results Feb. 28. In May, Dell announced that it would eventually trim about 10 percent of its worldwide work force of 82,000.
Since Michael Dell returned to the CEO position in January 2007, the company has being trying to reinvent itself by adopting new technology, emphasizing enterprise services, developing new channel programming and selling its PCs through retail partners. The company's makeover plans also called for reduction in the work force to help streamline its operations.
The reductions did not include those employees that Dell inherited during its numerous acquisitions in the last eight months, including its $1.4 billion purchase of storage vendor EqualLogic.
During a call with analysts, Donald Carty, Dell's chief financial officer, explained that the company actually reduced its head count by 5,300 positions but then reassigned or hired 2,100 employees to other positions, including customer support.
"We clearly have a lot more to do with cost," Carty said during the call, adding that he was confident that Dell would reduce the work force by about 8,800 employees.
During its fiscal fourth quarter, which ended Feb. 1, Dell's net income was $679 million or 33 cents per share, which is a 6.5 percent drop from the $726 million in net income the company posted a year ago. For the quarter, Dell's revenue increased from $14.5 billion last year to $16 billion this year.
Wall Street had been calling for profits of 36 cents a share and revenue of $16.3 billion, according to Reuters Estimates. In a statement, Dell announced that "the company will continue to incur costs as it realigns its business to improve growth and profitability."