updated 03:12 pm EDT, Wed June 13, 2012
Sales group to be hardest hit
Dell has announced plans to slash its expenses by more than $2 billion over the next three years, as the computer maker struggles to adapt to the transforming market. The majority of the cost cuts will be focused on the sales group, while optimizations within the supply chain are expected to bring approximately $600 million in savings.
In a meeting with analysts, CEO Michael Dell acknowledged that the industry is "constantly in transition" and the company views software as "an area where we can grow rapidly." A shifting strategy will place more importance on partners and less focus on owning products in each category.
The company last month reported a 33 percent fall in profits, as revenues from the consumer division continue to slide year-over-year. Revenue from enterprise sales and small- to medium-size businesses showed an increase for the quarter, though not enough to compensate for the falloff in consumer PC sales.
Competitor HP has encountered similar difficulties, pushing the company to reduce its workforce by 27,000 employees by the end of 2014. The company expects to achieve at least $3.5 billion in savings from the layoffs and other restructuring plans, enabling expanded investment in cloud, big data and security segments.
Dell has yet to detail the number of employees that will be displaced as part of the cost-savings plan.