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To: tonyt who wrote (89587)	2/9/2001 10:45:11 AM
From: tonyt	Read Replies (1) \| Respond to of 97611

Forbes.com Disaster Of The Day: Dell Computer By Lisa DiCarlo Overaggressive expansion during a period of slowing PC sales has led Dell Computer to its first layoffs in its history. The company will eliminate up to about 2,000 jobs to bring its costs in line with market realities. ``Dell was always hiring to catch up with growth, but when things started to slow a year ago, [Dell] overbuilt in terms of headcount,'' said a source with direct knowledge of the situation. ``There is an effort to correct that now.'' On Jan. 22, Dell (Nasdaq: DELL - news) said fiscal fourth-quarter earnings and sales would miss estimates. Revenue will grow between 25% and 27% to about $8.5 billion instead of $8.7 billion. Earnings will come in at 18 cents or 19 cents a share, a big miss from the 26 cents it previously anticipated. The company will announce results on Feb. 15. While Dell continues to outgrow the market, the heady growth of the past decade will likely never be achieved again. Indeed, the entire PC industry is in a severe slump, with inventories of finished goods and components piling up all over. In fact, several sources say that component companies have become so desperate to unload supply that they're offering to help subsidize marketing and advertising programs to move product. Intel (Nasdaq: INTC - news) has done that for years with its multibillion-dollar Intel Inside cooperative marketing campaign, but this type of program hadn't been extended to memory, printer and scanner companies--as it is now. Some PC makers already getting volume discounts are being offered further reductions of up to 20% on hard drives. Component makers ``are doing everything they can to try to stimulate demand,'' says an executive with a top PC maker. ``There is enormous pressure on suppliers.'' The whole industry is under pressure to cut costs, and it was inevitable that even a lean company like Dell would be hit by the downturn. Too bad for investors that Dell didn't see it coming earlier.