Dell Inc. confirmed Monday that it has made a “limited number” of staff reductions worldwide and in Central Texas over the past two weeks, saying the cuts were based on a review of its business operations.
The company declined to say how many workers were affected, what kinds of positions were cut or which work locations were impacted.
Company spokesman David Frink noted that the company continues to hire to fill needs in such areas as enterprise sales and engineering.
Dell is the world’s third-largest personal computer maker, and employs about 14,000 workers in Central Texas, making it the area’s largest private employer. The company has more than 100,000 workers worldwide.
The job cuts come a few weeks after Dell Inc. reported second-quarter results in which profit fell 72 percent from the same time last year. Analysts said Dell Inc. fought hard in the quarter to increase its share of personal computer and server sales despite weak global market conditions. Dell isn’t the only information technology company cutting back. Cisco Systems last week announced it was cutting 4,000 jobs worldwide in response to weak market conditions.
Analyst Patrick Moorhead with Moor Insights & Strategy said Dell Inc., Cisco and other major information technology companies are responding to slower purchases of computer equipment by businesses that are cutting spending amid concerns about fragile economic conditions.
“I believe there is going to be a bounce-back,” Moorhead said. “We went through years and years of growth and now the market is taking a little bit of a pause to catch its breath.”
Analyst Brian Marshall with ISI Group said he believes Dell Inc. is aligning its resources to “where the growth opportunities are.”
Dell Inc., which is the target of a management buyout, aims to revamp its business over the next several years to become a stronger provider of advanced hardware, software and services for enterprise customers.
Shareholders are scheduled to vote on the proposed $24 billion-plus buyout by company founder and CEO Michael Dell and his financial ally Silver Lake Partners on Sept. 12. The buyout is contested by some major shareholders including billionaire activist Carl Icahn, who say the price being offered is too low.
If the buyout is approved by shareholders, Dell has said the transaction could be completed by the end of October.