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Steep layoffs being planned at Dell

Posted on: 19-Mar-2007

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Dell is expected to announce a steep layoff later this month, with rumors swirling that Dell will axe at least 10 percent of its workers and perhaps as much as a shocking 30 percent of the workforce.
Michael Dell took back the CEO reins from Kevin Rollins in early February, causing employees to stand and applaud when the news was announced. Rollins had adhered to a cost-cutting model that had worsened Dell’s already shaky reputation for quality and customer service, areas Dell is moving quickly to fix. And he was seen as a bit of a fuddy duddy.
While costs were being wrung out of component suppliers, a bureaucratic malaise settled over Dell’s Round Rock headquarters, with Rollins creating layers of management that many found stifling. Thus, the impending layoff is seen as a necessary part of the program to remedy problems created by Rollins.
The optimists believe Michael Dell has the credibility -- with both employees and Wall Street -- required to turn things around at Dell. As Dell Inc. attempts to improve its presence in the cost-sensitive consumer PC market, look for more outsourcing to Asian suppliers.
To shake things up, Michael Dell needs to do what the CEO of oil industry supplier Halliburton did by moving to Dubai. Michael Dell probably could take his reconstituted management team to Shanghai or Taipei for a few weeks to absorb first hand the pace of change going on in the computer sector.

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