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Dell pressures workers into leave without pay

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Nearly all employees at Dell are being asked to take a week of unpaid leave. If they don't obey, another round of layoffs will begin.

Workers at the Round Rock-based PC vendor recently got an email memo from founder and CEO Michael Dell outlining the company's latest efforts to cut costs this quarter.

Part of Dell's scheme asks workers to take up to five days off without pay sometime within the next three months. The company also instituted a global hiring freeze, is offering voluntary severance packages, cutting travel budgets, and sacking temporary and contract employees.

"We're taking action in this fourth quarter to reduce costs and improve Dell's long term competitiveness in a time of economic uncertainty," said Dell spokesman David Frink.

The unpaid leave will be strictly voluntary, Dell's memo stated, but it also warned the company may resort to layoffs if this round of cutbacks doesn't reduce operating expenses as hoped. The company didn't say how many employees would need to take leave time to consider the program a success.

The three months time frame ends in January, not coincidently the same time as the close of Dell's fourth quarter 2009. Like a Jenny Craig reject, Dell has been desperately trying to make reductions, only to feel the bitter poison of defeat each time it steps on the scale.

Dell's motto now is to save $3bn in annual costs by 2010 by means of layoffs, shifting to lower cost producers, layoffs, miscellaneous cost-cutting measures, and layoffs. Also, if there's time afterward: layoffs. Dell has already axed at least 8,800 jobs since last year.

Of course, just like PC market share, Dell plays second fiddle to Hewlett-Packard in mass sacking. HP announced in September it would lay off 24,600 jobs worldwide as it merges the massive IT services organization EDS with its own existing massive IT service organization. ®

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