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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: tonyt who wrote (89586)	2/9/2001 10:18:01 AM
From: tonyt	Read Replies (1) \| Respond to of 97611

Dell stock down after report of job, expense cuts NEW YORK, Feb 9 (Reuters) - Dell Computer Corp. (NasdaqNM:DELL - news) shares fell nearly 6 percent on Friday following a report that the world's No. 2 personal computer maker may be readying for layoffs and expense cuts of up to 10 percent due to weak demand and a price war. Dell spokesman Mike Maher declined on Thursday night to comment about any such move, which was first reported in the Wall Street Journal. Citing people familiar with the directive, the newspaper reported in its Friday edition that Dell had warned some managers about expense cuts of between 8 percent and 10 percent. The article also said some employees of the Round Rock, Texas, company believe as many as 4,000 of its 39,000 full-time positions could be eliminated. Maher did say Dell was cutting back its temporary work force, which he said was typical for the beginning of a fiscal quarter. Dell stock was off 1-1/2, or 5.8 percent, at $24-8/16 in early trading on Nasdaq, where it was among the most active issues. In the past year, the shares have ranged from $16-1/4 to $59-11/16. Computer makers have been reining in their expenses recently, bracing for an extended period of weak profits. In January, PC and printer maker Hewlett-Packard Co. (NYSE:HWP - news) said it would eliminate 1,700 positions, and Gateway Inc. (NYSE:GTW - news) , said it would cut about 3,000 jobs. ``I think the industry conditions are still unstable,'' Bear Stearns analyst Andrew Neff said. Buckingham Research Group technology analyst Peter Labe said Dell's strategy of cutting prices to maintain and increase market share has taken a toll on its bottom line, making significant cost reductions almost a necessity. ``Dell is well known as championing an aggressive price policy, particularly in tough times,'' he said, ``and it's got to be funded out of somewhere.'' Labe said layoffs would not be unexpected and that investors would probably welcome the expense reductions. ``I think the shareholders would rather have it funded from the fat that's built up over the good years and less out of their own pocket,'' he said. In January, Dell warned that it would post disappointing results in the fourth quarter, joining a gang of other PC companies -- including Apple Computer Inc. (NasdaqNM:AAPL - news), Compaq Computer Corp. (NYSE:CPQ - news), Gateway, and Hewlett-Packard -- that have guided their outlooks lower. In a conference call after the warning, Vice Chairman Kevin Rollins hinted that cost-cutting could be in the cards. ``In a tough economic environment,'' he said, ``the low-cost model wins.''