Dell CEO Says to Expect More Job Cuts

ROUND ROCK, Texas (AP) — Dell Inc. is committed to reducing costs and will cut more jobs than the 8,800 previously announced in a bid to make the world's second biggest computer maker more competitive, founder and CEO Michael Dell said Thursday.

At the first full analyst meeting since 2005, Dell addressed the ongoing turnaround of the computer company, which was eclipsed as the world's largest PC maker in 2006 by Hewlett-Packard Co.

"We have identified a very significant opportunity here and are aggressively going after it," Dell said. "To be very clear, we are not satisfied with the current state of affairs and we are on a mission to address this."

Dell aims to cut $3 billion over the next several years to boost profits.

Last year, the company announced plans to cut 8,800 jobs, or 10 percent of its work force. The company this week announced plans to cut 900 jobs in the Austin area by closing a plant.

On Thursday, Dell said the company would exceed the previously announced figure, but didn't give a new estimate.
"We're decreasing our head count," Dell said. "It's declined in the past two quarters and it will decline again in the first quarter. And we will go past the 8,800 target previously discussed as we achieve everything that I'm outlining today."

CFO Donald Carty said Thursday that 5,500 jobs have been cut, with 1,000 more to come this quarter. He added that with an increase in "frontline" personnel — those in positions like sales and customer support — the net reduction is 3,200.

Carty also said the company plans a share repurchase of at least $1 billion this quarter after repurchasing $4 billion last quarter.

To accomplish the cost cuts, Dell said the company is taking the approach that the company has no fixed costs.

"Every area of the company is being pursued," he told analysts.
Dell said the company expects its operating expenses percent to be down at the end of the year.

"The entire Dell leadership team is focused on addressing these opportunities and challenges," Dell said. "We believe we've begun the journey to transform the company."

The company has focused its ongoing turnaround efforts on five priorities: notebooks, emerging countries, consumer, enterprise and small-medium business.

Its shares fell 21 cents to $19.74 in morning trading Thursday.