Further belt tightening
Giant system builder Dell has increased its targeted cost cuts from $3 billion to $4 billion by 2011 after reporting a 48 percent year-on-year drop in profits for the quarter ending 30 January 2009.
Revenue for the quarter was down 16 percent on the same period a year ago at $13.4 billion, but full-year revenue of $61.1 billion was more or less the same as the previous year. Yearly profits were down 16 percent to $2.5 billion.
"Customers know they need information technology, and we think we're best able to help them use IT to improve productivity," said chairman and CEO Michael Dell. "But a lot of IT spending is being deferred until there's better economic visibility.
"Within our business, we're being very disciplined in managing costs, generating profitability and cash flow, and investing in ways that separate Dell from others today and when the economy inevitably improves."
CFO Brian Gladden commented on Dell's cost cutting efforts: "We said last March that we would reduce costs by $3 billion annually by the end of fiscal 2011. The cost actions we took this past year made us more competitive and delivered value to customers in a challenging economic environment. In fact, we now have a clear view to additional opportunities, and are raising our cost-reduction target to $4 billion."
