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.

Who Says Inflation Is Under Control

Consumer late payments at 16 year high. Could higher prices at the grocery check-out and at the fuel pump be putting the squeeze on our wallets?

Unemployment claims at there highest level in two years.

ATA Airlines shuts down stranding thousands and laying off 2,000. The cost of fuel was listed as one of the primary causes. Last week Aloha Airlines also shut-down operations.

Corn sets new record price of $6 per bushel. At least our all-knowing government officials tell us that inflation is under control.

Gasoline at new national record. Even with oil backing off there peaks, the cost of refined gasoline is starting its summer rise. Every spring refiners increase their crack spread (the mark-up on gasoline) to reflect the increase in demand. This process has just started.

Motorola disconnecting 2,600 more. Last year they had lay offs of 3,500 in January and 4,000 in May. During a cutting stretch in 2000 and 2001 their payroll shrank by more than 47,000 jobs.

Google planning to cut 25% in the Double-Click work force, in the U.S. that is.

Dell needs to find $3 billion more in cuts than the 8,800 they announced last year. From my article last July.

Merrill Lynch to lay off 4,000 to 7,000.

Schering-Plough will be cutting $1.5 billion a year in expenses, no estimate on how many jobs will be lost. Schering-Plough shares are down about 50 percent this year so heads have to roll.

Are you ready to pay for the poor Home Builders losses? Time to E-mail your congressmen.

NASA estimates as many as 7,300 will loose their jobs as the shuttle program ends in the next 2 ½ years.

La-Z-Boy is shipping jobs to Mexico, all of their cut and sew divisions will be relocated with no lay off estimates given.

Hamiliton Sundstrand will be completing its move to Singapore by lying off the last 65.

United Way officials in Dayton said record numbers of families are seeking emergency food assistance because of lay offs caused by the strike at Detroit-based American Axle & Manufacturing. My article: American Axle Moving More Jobs Out Of The U.S.

CBS Moves Ahead With Layoffs in News

1,500 Possible Layoffs at Freightliner Cleveland Plant. My previous article: Freightliner The Long Haul From North Carolina To Mexico

From the CoStar web site that monitors the Fed’s watch list:

The Federal Reserve Banks moved up the planned closing of several of its check processing facilities, most of the cuts will come from permanent result work reductions.

Newsweek announced that 111 staffers on its news and business sides in New York City accepted a buyout last week.

Chromcraft Revington Inc. is progressively shifting manufacturing of products from its Delphi, IN, plant at 1100 N. Washington St. to suppliers primarily in Asia. Manufacturing activities at the Delphi facility will conclude on May 30. The reduction in force is expected to impact approximately 150 Associates at the Delphi location. Within the past 18 months, the company has closed and sold its plants in Sumter, SC, and Warrenton, NC, as well as its warehouse and distribution center in Knoxville, TN. The company also relocated its upholstery operations into its existing facilities in Lincolnton, NC, and sold its upholstery plant.

EMI Christian Music Group confirms layoffs of between 1,500 to 2,000 staffers by this June.

Long-expected layoffs begin at W.Va. steel mill, from a peak of 13,000 to 1,000 after these latest cuts. Steel mills have been devastated throughout the northeast by Asian steel and like most of the problems facing America; all the politicians do is use this issue as political fodder.

Earlier this week, Wheeling-Pitt's parent, Esmark Inc., announced it would shut down a mill in Allenport, Pa., and idle parts of the operation in Martins Ferry, Ohio. Those cuts could cost as many as 360 jobs.

Analysts see 200,000 banking industry layoffs in the next 18 months.

Whirlpool, a great old Mexican brand. 350 Cleveland jobs go to Mexico. Behr Climate Systems plans layoffs, plant closure. From the Germany based Behr Groups web site: “Today we are active in all major markets in Asia and take advantage of the opportunities they offer.”

Dell Computers; Layoffs, Issues And More Layoffs

We’ll have to wait-and-see who these layoffs affect. But layoffs aren’t the only part that will impact American jobs, Dell forecasts a 20% rise in Asian sales and will use this to shift an even higher percentage of their growth to that region.

Any discussion of the announced layoffs, of approximately 8,800 staffers at Dell, invites commentary into a number of other issues that are impacting the company. Since these “other” issues impact who will be let go, they will be touched on below.

Lately companies have been trying to down play their layoff and offshoring activity, hidden at the bottom of Dell’s “End-to-End Transformation” section of their May 31, 2007 Press Release:

“…As a part of this overall effort, Dell will reduce headcount by approximately 10 percent over the next 12 months. The reductions will vary across geographic regions, customer segments, and functions,…”

As written about in Call Centers: The Best And The Worst, a CRM Lowdown survey of the ACSI ,The American Customer Service Index, listed Dell as the worst company in America for Customer Service. Poor customer service has become legendary at Dell with bloggers dedicating entire sites just to handle their poor service and product issues. The company has responded in a number of different ways including a one2one blog so that dissatisfied customers can discuss their problem directly with a Dell employee, not necessarily someone who has a script and strict rules to follow. They have also added a problem resolution link to their web site so several layers of the service bureaucracy can be bypassed. From the same Press Release:

“Improved customer satisfaction ratings through increased investment in technical support resources like Dell Support Center and DellConnect. These investments helped the company achieve a 66 percent decrease in the number of times customers are transferred before their issue or question is resolved.”

The accounting investigation has caused Dell not to file Form 10-Q for the last four quarters, Dell has requested four extensions from the SEC, but the last approval only gave them till July 16, 2007. This date is from their Press Release on July 3rd!

Also from Dell’s Press Release, the company to date has spent $46 million on this accounting investigation, there is little doubt that some of the layoffs will occur in the accounting department once the investigation concludes,

From an Associated Press article printed in the Greensboro News & Record:

“It wasn't supposed to work like this. Paying $280 million to lure a Dell plant was supposed to ensure high-tech jobs at the computer maker and at ancillary businesses it would attract. Instead, Dell's health has faltered and 8,000 jobs will be cut in the next year.”

Two more articles:
Layoff report at NETWORKWORLD
One in Ten Dell Employees To Be Laid Off