Dell lays off 8,000 as 1Q earnings fall

Associated Press ^ | May 31, 2007 | Matt Sagle

[Zakeet]

Dell Inc. said Thursday that earnings fell slightly in preliminary first-quarter results, but the computer maker planned to lay off more than 8,000 employees over the next year as part of an ongoing restructuring.

Dell said it earned $759 million, or 34 cents per share, in the three months ended May 4. That compared with $762 million, or 33 cents per share, in the year-ago period.

First-quarter sales rose nearly 1 percent from the year ago period to $14.6 billion.

[Snip]

The layoffs, which represent 10 percent of Dell's global work force of 88,100 full time and part-time employees, come as Dell struggles to regain market share after Hewlett-Packard Co. ousted it from the top spot in worldwide computer shipments last year.

In the first quarter, HP kept its lead over Dell with about 4 percent more shipments, according to tech research firms IDC and Gartner Inc.

As part of an ongoing turnaround effort led by Michael Dell, the company has undergone an executive shake up and numerous other changes to improve customer service and reclaim market share.

The company said it was reviewing costs across the board and that the job cuts would vary across geographic regions and customer segments to "reflect business considerations as well as local legal requirements."

"While reductions in head count are always difficult for a company, we know these actions are critical to our ability to deliver unprecedented value to our customers now and in the future," Michael Dell said in a statement.

[ExpandNATO]

Communicating with the Indian support staff goes kind of OK if the caller knows the jargon and the computer inside out. I can usually (95%) guess what the tech is referring to.

Less technically oriented people have trouble because the Indian simply does not have the cultural background and intimate knowledge of American English to tease out what exactly is wrong. In one instance, things went so far as the tech a ordering a replacement hard drive, when a simple Detect and Repair fixed the problem once I got involved.

[LonePalm]

I was in the market for a Dell back in February until the told me that I could only get it with VISTA and couldn't get a credit for not taking it.

I told them they could keep their computers (or words to that effect).

Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
(Keep the Faith, my friends! We are the saviors of the Republic! Now and Forever!)
LonePalm, le Républicain du verre cassé (The Broken Glass Republican)

[durasell]

And if this is true, why didn’t the geniuses at DELL see this coming? Were they too busy counting their profits from their Indian support centers?

---

My guess is that they did see it coming. In recent years they added other products to their offerings, such as MP3 players, digital cameras, etc. but it wasn’t enough.

Plus, there really hasn’t been a must have “killer app” for a couple of years.

[dragnet2]

Everyone who could afford and wanted a computer over the last ten years pretty much has one.

Really? I just bought a new lap top 1 year ago, not a Dell though. I had no idea people are no longer buying computers. It's good to know I'll never need another computer again. They all work so flawlessly you know.

Too bad Dell didn't see this coming. I guess they were preoccupied.

[pepperdog]

I hope the layoffs are in the area that has cost them their market share and their reputation, namely the foreign folks who are barely conversant in English and are schooled to try to pass themselves off as Steve. But I suspect they will continue their downward spiral by laying off their productive US employees and keeping those “economical” third world employees. I like my Dell but I won’t be buying another, I need to understand and be understood by the CSR and it ain’t happening these days.

[GunRunner]

My Dell desktops have always been trouble free. And “Vincent” in Bombay was good enough to be able to have a replacement optical drive installed in home in 24 hours when I had one go out.

[dragnet2]

My Dell desktops have always been trouble free. And “Vincent” in Bombay was good enough to be able to have a replacement optical drive installed in home in 24 hours when I had one go out.

Ya see, you know a company is providing a great product and support when they lay off 8,000 Americans and their profits are down.

[Abby4116]

While I strongly dislike dell because of hteir poor quality computers, I’ve never understood the extreme dislike most people seem to have for the Indian tech suppport staff. I’ve yet to speak to one (and believe me I’ve spoken to many from various companies) that I couldn’t understand and who wasn’t polite and didn’t do their best to resolve whatever issue I might be having.

My only experience with Dell tech support was not encouraging. I called to get an RMA for hardware failures in a laptop. Forty-five minutes with a tech support person in India (uninstalling and reinstalling software) was not going to resolve the problem. Finally, the third person (not in India) I spoke to gave me my RMA. Everyone was polite - but if part of the keyboard doesn't work, same side speaker doesn't work and touchpad doesn't respond software re-installation isn't going to cut it.

Remember, also, we have paid for that warranty service on top of the price of the computer.

[Drew68]

I’ve never understood the extreme dislike most people seem to have for the Indian tech suppport staff. I’ve yet to speak to one (and believe me I’ve spoken to many from various companies) that I couldn’t understand and who wasn’t polite and didn’t do their best to resolve whatever issue I might be having.

I concur. I had a Dell and I had to call to try and fix something. The CSR I spoke to was articulate, professional and quickly helped me resolve the issue.

Personally, if I was the owner of a large company, I would outsource the Customer Service call center. Customer service isn't a revenue generator. I don't think companies are required by law to provide phone-based customer service at all. It is done as a courtesy to please customers. Might as well do it as cheaply as possible.

Dell is losing customers not because of their outsourcing call centers but because of people like me. After 15+ years of using Windows based PCs, I went and replaced my old Dell with my first iMac last week. This decision had nothing to do with Dell --I actually really liked my Dell. It had everything to do with Windows. After endless problems and hearing horrible reviews about Vista, I threw in the towel and said "goodbye" to Windows.

[DemEater]

I love how they all have American names when you call. I like to ask if that’s a southern accent I detect.

[durasell]

Yeah, that way we can all go out and buy Chinese computers from Haier, that’ll show those stupid American companies!

[utherdoul]

Or perhaps the Americans were demanding ludicriously high wages and less work or threatening to unionize or a dozen other things.

Don’t mistake my meaning I try to buy American when I can and have nothing but respect for our labor force but after seeing how much trouble American based companies have to go through over labor and countless other issues I’m not suprised many companies move over seas.

Europe frankly I can’t imagine how they stay in bussiness period.

[Tolsti]

Dell laptops are falling way behind the curve. Last I checked, they don’t even have any new Santa Rosa based ones at all. And certainly no Geforce 8600 based video cards in them.

[Tolsti]

By the end of the year Core 3 8’s should be out. AMD’s probably not going to catch up, if ever, for many years now.

[Abby4116]

Well they are now going to sell their computers at Walmart so my guess is they are going 100% Chinese :)

I have read that Walmart's computer repair service is very good (and reasonable to buy). Perhaps this is a good move by Dell.

My HP laptop is made in China :(

[Ole Okie]

I have bought 2 Dell computers in the last 5 years and they have been trouble free and worthy of commendation

I had that same experience. My latest is a 3.1 gig Dimension 8250, and it is blazing fast and has given no trouble atall. I have no complaints about my two Dells.

Also have an Apple MacBook Pro and it is a little jewel.

[dragnet2]

Or perhaps the Americans were demanding ludicriously high wages and less work or threatening to unionize or a dozen other things.

It's the employees fault. And Americans can't hear well enough to understand Dells India support staff.

Dell should just relocate to India and solve these problems.

[38special]

I had ‘Peter Parker’ on the line one time I called. I said, “Spiderman!” and asked him where he was. He said, “Austin” and I laughed. I said, “No you’re not, you’re in Bombay”. He replied, “No, New Delhi”. Seriously.

[durasell]

To all those rejoicing in the loss of 8,000 American jobs. I respectfully suggest you try rooting for the “home team” every once in awhile.

[utherdoul]

a billion customers many starting to get rich enough to afford personal computers, If I were dell I’d certainly be looking at the possibility in the next ten or fifteen years.

And yes its been employees wanting higher wages then their labor is worth and wanting to live well beyond their means, AND politicions who back such things which make outsourcing so attractive.