Dell to shut North Carolina plant, cut 905 workers

Discussion in 'Economics' started by sub0, Oct 7, 2009.

  1. sub0


    Looks like laying off workers is how more and more companies are cutting costs. Higher unemployment for the sake of meeting earning estimates.

    SAN FRANCISCO - Dell Inc said it will close a North Carolina desktop computer manufacturing plant early next year, laying off 905 workers, as the world's No. 2 PC maker continues to shed jobs and streamline its business as its copes with declining sales and market share.

    Dell is in the middle of an effort to wring out $4 billion in cost savings by the end of fiscal 2011.

    Nearly 60 percent of Dell's revenue comes from PCs, which have been severely impacted by the global economic downturn. The company is very reliant on hardware sales to businesses, which have drastically cut back on spending.

    The company posted a 22 percent decline in revenue in the July quarter, while net income fell 23 percent.

    Dell trails Hewlett-Packard Co in the PC market, and is feeling the pressure from No. 3 Acer Inc, which has been gaining market share.

    According to industry tracker IDC, Dell's shipments fell 17 percent in the calendar second quarter. Its market share stood at 13.7 percent.

    The closure of the Winston-Salem facility is expected to be completed in January, Dell said on Wednesday. About 600 of the affected employees are expected to be laid off next month.

    Dell had around 76,500 regular employees as of January 30, down from 82,700 a year earlier.

    Shares of Round Rock, Texas-based Dell fell 1 percent to close at $15.36 on Nasdaq.
  2. ...and to think that we gave this company $280 million in incentives to come here. What a waste of tax-payer money! It is absurd.

    - Greg
  3. sure would be hard pressed to claw back those give aways, since there's some arrogance on the corporate part to disavow those concessions going forward

    tough situation that every major city has had to deal with for years,

    seems this city in NC has joined the big leagues,

    so, where are the farm jobs, since there just doesn't seem to be those anymore...
  4. dewton


    wow that sucks. seems like every day there's another company going down or cutting off a part of their work force. i feel we're getting closer to mass civil unrest in this country...
  5. indexer


    I suppose if these jobs were unionized people would be saying - see, the union killed these jobs.

    But they were not union. Just Dell deciding that its cheaper to assemble the entire PC in Asia.
  6. OP makes a correct & important point here - any positivity in earnings is a result of cost cutting.
  7. Dell should have gonna BK years ago. They make the worst boxes and give some of the worst service I have ever been a part of.
  8. lrm21


    Dell should of gotten out of the PC business 5 years ago. Too stupid to see the writing on the wall.

    The plant closure is 50% the economy and 50% dell ineptitude.