Feeds

Dell cheers Q1 with workforce decimation

2.0 - 8,000 = more money

Boost IT visibility and business value

Dell will decimate its workforce over the next year, eliminating more than 8,000 jobs. The company released word of this restructuring as it dished out first quarter financial results that beat market expectations.

Reinstalled CEO Michael Dell vowed to make cuts during a recent interview, saying Dell's headcount has grown by 50 per cent in recent years, while revenue has grown just 15 per cent. "That's not a good idea," Dell said. So now the company plans to cleave 10 per cent of its staff in a bid to reduce costs and return Dell to its glory days status.

"While reductions in headcount 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," CEO Dell said, in a statement today.

For the first quarter, Dell reported revenue of $14.6bn up from $14.2bn reported in the same period last year. Net income, however, dipped to $759m from $762m.

Despite the net income drop, the results appeared to please Wall Street, which expected lower revenue and net income totals. Shares of Dell were up 5 per cent in after-hours trading, at the time of this report, to $28.40.

(All of the financial results in this report are considered preliminary due to an ongoing investigations into Dell's accounting practices. Dell spent $46m during the quarter to deal with these investigations.)

Dell's first quarter was blessed by declining component costs and healthier high-end product sales, the company said. Notably, Dell's server revenue grew 19 per cent year-on-year to $1.6bn, while storage revenue rose 13 per cent to $500m. Dell also notched a 7 per cent rise in laptop sales to $4.0bn and a 6 per cent increase in software and peripherals sales to $2.3bn.

The desktop market remained very tough for Dell with revenue dropping 6 per cent to $4.9bn. Services revenue dropped as well to $1.3bn from $1.4bn in the same period last year.

Dell declined to provide a, er, numbers-based second quarter forecast. Instead, it warned investors to have patience as Dell 2.0 takes shape.

"While progress in the first quarter was encouraging, the company is focused on transformational efforts aimed at IT simplification that are designed to yield more robust and targeted customer solutions, superior customer experience, and expanded growth opportunities in the coming years," the company said. "These efforts may cause short-term fluctuations in operating performance, but the company believes they will produce a more optimal and sustainable balance of growth, profitability and liquidity in the long-term, driving sustainable returns for shareholders." ®

Build a business case: developing custom apps

More from The Register

next story
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.