Dell denies layoff reports
PC maker says temp reductions are routine
By CBS.MarketWatch.com
Last Update: 9:15 AM ET Feb 9, 2001
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NEW YORK (CBS.MW) -- Dell Computer denied rumors late Thursday that it's planning to cut as much as 10 percent of its workforce, saying rather that it has reduced the number of temporary employees in a routine seasonal cutback.
A spokesman for Dell (DELL: news, msgs) called a broadcast report Dell could eliminate up to 4,000 jobs "pure speculation," CNNfn.com reported.
Speculation has been growing that Dell will move to cut jobs since the PC marker warned on Jan. 22 of a sales slowdown. At the time, Chief Executive Michael Dell said, "Our businesses will make adjustments as they see necessary, as we see necessary to ensure that we remain competitive."
In a note to clients Friday, analyst Richard Chu at SG Cowen said, "We have felt for some time that headcount growth has been way too high relative to revenue growth."
Dell's sees an average of $125,000 in revenue per employee, which is up from $197,000 a year ago, but down from $242,000 three years ago, Chu said.
Another spokesman for the personal computer maker, Mike Maher, was quoted by Reuters as saying, "What are you seeing is routine comings and goings of temporary workers in Dell."
The report also said Maher added that Dell increases its temporary workers near the end of fiscal quarters and cuts back at the start of new quarters.
Dell's fiscal fourth quarter ended on Feb. 2 and it is scheduled to report earnings for that period next week.
Several major PC companies have announced layoffs in recent months, including Hewlett-Packard (HWP: news, msgs) and Gateway (GTW: |
