Jun 27, 2008

Dell Computer: Déjà vu 8,800 Last Year, 8,800 This Year

Last year I wrote an article: Dell Computers; Layoffs, Issues And More Layoffs. At that time I had no idea that I would be writing practically the same article this year. But Dell is like their service, consistently bad.

Dell has never given out straight forward information about their plans for staff reductions but rather they throw out a target number for the national business media and the small local layoffs get reported on in the smaller news markets around the country. The most accurate information has come from a NETWORKWORLD article by Dan Nystedt and reports that Dell has already completed 3,200 layoffs with another 5,200 happening soon.

Even though desktop computer sales improved by 10% last year, they will be closing their desk top facility in Austin, Texas and many that aren’t losing their jobs will be forced to take unpaid time off.

For more than a year Dell has been going through an audit that they claim was caused by certain departments fudging their numbers. As a result they will restate their earnings reports from 2002 through 2006 by a mere $150 million. That's a lot of fudge.

Dell is also being sued on two fronts, first for not performing on their extended warranties sold directly to customers and second for falsely advertising the terms being offered by their company owned financial arm. It has been reported that Dell’s financing division is now up for sale.

Dell, IBM, Intel, Cisco, HP and Microsoft have all gazed into the crystal ball and have seen their future in Asia and India. Doing business in the U.S. has just become too tenuous.


Anonymous said...

I am a recently laid off employee of Dell. The last 4 years have been a roller coaster to say the least. I'm not disgruntled, I received a severance package, but I still have anger towards what happened. So what's the point? My point is, that Dell hired 3 top execs for a total of $61M, that's millions of dollars. So far the only recommendation I've seen them make to bring the company back in line with earnings forcasts has been to cut budgets and people. What type of juvenile thinking is that? Any fool could have done that, M. Dell could have saved himself $61M and done the this himself, it doesn't take hired guns.
Would I like my job back? At this point NO.
All of the ousourcing being done will once again come back to haunt them as it has in the past. My department was set up to handle complaints about outsourcing and non english speaking reps. In a few months when execs are being bombarded by enough consumers who've had enough, then they will re establish that queue. So much for cost savings. Oh, and if not, who really cares. Not the execs that made the cuts. They'll be gone with their golden parachute, lots of backslapping for a job well done and the thanks of the stockholders.
Just a reminder to the management of Dell, without a reputation for supporting your products it will be harder to sell to a skeptical public, and sales will lag, the only way to sell will be to continue offering the lowest possible cost system and usually that means quality will suffer even more.

Fred Adelman said...

A: It’s sad when anyone loses their job but it sounds like you have it together and will find something you enjoy. People don’t mind working hard; it’s the turmoil, uncertainty, drama and politicking that can turn a person’s attitude sour. You have to protect your attitude, not every company is a Dell or Nielsen.

Our parents and grandparents built these companies and were proud of the companies and the people they had poured their lives into. Today companies like Dell take the view that all of their opportunity for growth and cost savings is in India and Asia. Weak managements fail to see the human assets at their disposal and it’s so much easier just to turn them into disposable assets.

The American worker is now competing for jobs with people from all over the world and there aren’t any good solutions. Any government intervention only exacerbates the situation by placing more regulations and restrictions on businesses and further justifying their flight.

Myself, I just refuse to buy anything from companies that are actively pursuing outsourcing and in my own small way try to throw some light on their efforts. Most people think that they don’t have an effect, but if enough people send the message they will get it.

My only advice to anyone in your shoes is probably the same advice you would give, and that is to stand up and put it behind you as fast as possible.

Best Wishes and Good Luck,

Jerry said...

Dell provides high quality of computers and it is prefect for me...

cheap computers said...

I think the only recommendation I've seen them make to bring the company back in line with earnings forcasts has been to cut budgets and people.