Dell to Close Plant, Lay Off Workers ROUND
ROCK, Texas (April 08) – Dell Inc. said Monday it will save as much as
$3 billion over the next three years as it cuts costs and lays off
workers, with measures including closing a desktop manufacturing
facility in Austin.he world’s No. 2 computer maker will cut 900 of
17,500 jobs in the Austin area by closing the plant, company spokesman
David Frink said.Dell also reaffirmed its plan – announced last year –
to cut at least 8,800 jobs, or about 10 percent of its work force.
Frink said the Round Rock-based company didn’t have a time frame to
reach that number.
In the last nine months of fiscal 2008, Dell cut 3,200 jobs. The
Austin facility will close late in fiscal 2009, which ends Jan. 31,
Frink said.”Frankly, the elimination of jobs is significant whenever
and wherever you do it,” said Frink. “We’re working to minimize the
consequences.”Two months ago, Dell announced 1,200 job cuts, about 900
at a call center in Canada.The company also is closing 140 kiosks,
mostly in shopping malls, where customers could examine and order
computers but not buy them to take with them.Dell, built on sales
direct to consumers, is striking deals with more retailers to sell them
in lieu of using the kiosks.The company also plans a range of cost cuts
in design, manufacturing and logistics – and materials and
operations.”We’re talking about action we’re taking to improve our
competitive advantage and to rationalize our operations,” Frink said.
And
it is reviewing alternatives for its financial services business,
especially its consumer credit and its financing operation for small to
medium business customers. The company recently assumed full ownership
of its credit arm.Frink said the review could result in no change or in
the pursuit of new partnerships.”We’re absolutely committed to
financing being an integral part of our overall business,” Frink said.
“Dell Financial Services is a profitable Dell asset. We believe the
combination of Dell and the right structuring going forward will
actually be able to enhance it.”Shares of Dell rose 31 cents to close
at $19.92. They dropped and then regained 25 cents in after-hours
trading.