Dell announced plans on Thursday to cut around 8,800 of its global workforce of 82,800 permanent employees and 5,300 temporary staff over the next 12 months. No decision has been made yet as to the breakdown of the cuts and how many jobs will be lost from its Irish operations. The PC giant employs 3,000 staff in Limerick and 1,500 in Dublin.
In a statement Dell said the cuts would vary "across geographic regions, customer segments, and functions, and will reflect business considerations as well as local legal requirements."
The cuts were announced as the Texas-based firm released its results for the first quarter of 2007. Despite the proposed job cuts the results were generally positive for Dell as the firm beat analysts' expectations.
The PC giant had revenue of USD14.6 billion, up from USD14.2 billion a year ago and well ahead of analysts' predictions of USD13.9 billion. Net income for the quarter was down to USD759 million, equating to earnings per share (EPS) of USD0.33, from USD762 million and EPS of USD0.34 in the first quarter of 2006. Despite the fall, the EPS was still well ahead of the USD0.26 that had been predicted by analysts. Operating income for the quarter was USD947 million.
The market reacted positively to the results with shares in Dell rising 2.6 percent to USD26.91 at the close of regular trading on the Nasdaq, and increased further to USD28.58 in after-hours trading. Were Dell to open at that price on Friday it would represent a 52-week high for the PC maker.
Dell's biggest area of growth over the period was in its server business where revenues were up 19 percent year on year. Storage revenues also performed strongly with growth of 13 percent. Desktop revenues, however, were down 6 percent year on year.
The Texas-based firm said the results were preliminary pending an internal investigation of its accounting practices. The US Securities and Exchange Commission is also investigating Dell. The investigation into Dell's accounts has been ongoing for nearly two years and the PC maker may have to restate results for both the current quarter and the same period last year.
"Although this process has taken us longer than we would have liked, it is important to commit the time and resources required to ensure a thorough and comprehensive review and resolution of all identified issues and the implementation of appropriate remedial measures," said Thomas W. Luce III, chairman of the Dell committee auditing the company's accounting practices.
