Pink slip blizzards at Dell and Motorola
Founder and CEO Michael Dell announced that the 1,000 redundancies from closing his namesake company’s PC manufacturing facility in Austin, Texas, may be additional to the target of 8,800 announced on 31 March. Dell wouldn’t say what the new final total would be.
Michael Dell also said the company had no plans to follow the $1.4 billion acquisition of data storage network systems maker EqualLogic, completed in January. ‘We don't have an acquisition strategy,’ he said. ‘What we have is a growth strategy.’
Dell CFO Donald Carty said 6,500 jobs have been cut so far, including the Austin 1,000, while new hirings in sales and customer support make the net reduction 3,200. Carty also said the company plans a share buy-back of a minimum $1 billion this quarter, following $4 billion last quarter.
Dell shares rose 17 cents to close at $20.12 on Thursday.
Meanwhile Motorola announced a net $104 million pre-tax charge in Q1, mainly for severance payments to 2,600 employess, bringing the total to 10,000 since the start of 2007. Some of the workforce reduction comes from closing a Singapore factory and a Florida WiMAX development lab in Florida. The aim is to reduce costs by $500 million by the end of 2008.
Further job cuts will certainly accompany the announced spin-off of the mobile phone division already announced for 2009. High level executive departures are also likely to accelerate.
The market was not impressed. Motorola shares closed up only 1.66 percent at $9.77 on Thursday.
