Dell describes cost cuts in leaked memo
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(InfoWorld) - Stock in Dell was rising Monday on news thatÂ founder Michael Dell plans to remain as CEO for several years, trim the number of managers reporting directly to him, and eliminate bonuses. "We have a tough couple of quarters ahead. We didn't get here overnight, and we won't fix things overnight either," Dell wrote in a memo to employees on Friday. "Last year ... we had great efforts but not great results. This is disappointing, and it is unacceptable." Dell pointed to several problems with the company, including an overgrown bureaucracy and operating expenses that had grown too fast. "We have great people ... but we also have a new enemy: bureaucracy, which costs us money and slows us down. We created it, we subjected our people to it, and we have to fix it!" Dell said. "I am asking each of you to look across your organizations and eliminate redundancies." On Monday, a corporate spokeswoman confirmed the authenticity of the memo, which had been leaked to media over the weekend. The company has been buffeted in recent days by the resignation of CEO Kevin Rollins last Wednesday,Â Michael Dell announcing he would take over that job, and the accusation inÂ a lawsuit by investorsÂ on Friday that 15 top executives had garnered millions of dollars by selling their stock after propping up the company's faltering revenue with secret payments from Intel. Even before those blows landed, Dell was wobbling on a threat by the Nasdaq stock exchange to drop its stock unless the company files its overdue quarterly earnings reports.Â Dell has delayed filing those numbers for the past two terms as it struggles to satisfy an investigation by the U.S. Securities and Exchange Commission (SEC) of its accounting practices. It is not yet clear if that investigation is related to the investors' charges that Dell hid payments by Intel in exchange for staying exclusively loyal to one brand of microprocessor in its PCs. When Michael Dell announced on Wednesday he would return to his position as CEO, the company was already in the midst of a reorganization plan that calls for $100 million in spending to improve the customer service practices that allow it to bypass retail stores with its famed "direct sales" business model. The company was also following Rollins' plan toÂ remake itself as "Dell 2.0,"Â trying to move beyond an enormousÂ notebook PC battery recall in August by focusing on industrial design, overseas factories, and a move to diversify its computers by using chips fromÂ AMD as well as those from Intel. In his Friday memo, Dell added new details to that strategy. He promised to turn around the company by focusing on the SMB sector, enterprise servers and storage, shorter design cycles for new products, and increased sales in emerging markets. He also made a few corporate changes, recalling Paul Bell from his job running the company's markets in EMEA (Europe, the Middle East and Africa) to lead Dell's new Americas group, which includes the fast-growing SMB sector. Dell also created a "global operations" division to focus on manufacturing and procurement. "I remember what it's like to start a company. We're moving fast. There is no luxury of time. The competitors are fierce. The difference is this time we have many new assets and some hidden ones that can be brought out," he wrote. Dell did not describe the hidden assets he would use to rescue his company's prospects, but he hinted that Dell had enough resources to outspend its competition. AlthoughÂ Dell handed the title of world's largest PC vendor to HP this year, it is still a corporate colossus. "When I started back in 1984, it was just me. But now we are blessed to have an awesome team, many great assets, and $11 billion or so," Dell said. Â
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Blog: A blog post at Consumerist.com offering tips on buying from Dell draws a nasty cease-and-desist letter from the company's attorney--and then a chastened apology from a Dell manager.
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(InfoWorld) - Just two weeks afterÂ revealing that some employees had falsified corporate revenue to meet earnings targets, Dell reported a profit of $733 million for its fiscal 2008 second quarter, up 46 percent from its mark of $502 million for the same period last year. The strong result was driven by sales to enterprise customers, an increase in the selling prices of Dell PCs, and a drop in component costs, the company said. Dell recorded revenue of $14.8 billion for the quarter ending Aug. 3, generating earnings of $0.32 per share. Both figures were above Wall Street expectations of $14.63 billion revenue and $0.30 earnings per share, according to analysts surveyed by Thomson Financial. However, Dell warned investors to be cautious when comparing the figures to past quarters because the company plans to restate its earnings for the past four years. Dell plans to revise its quarterly and annual financial statements for fiscal 2003, 2004, 2005, 2006, and the first quarter of 2007. The company also plans to share a number of earnings reports it delayed filing during its internal investigation of the accounting fraud, including the last three quarters of fiscal 2007 and the first quarter of fiscal 2008. The Nasdaq stock market has given Dell a deadline of Nov. 12 to file those reports in order to meet requirements for a publicly traded stock. In addition, the U.S. Securities and Exchange Commission (SEC) plans to continue its own investigation of Dell's bookkeeping practices. Dell's accounting problems were more than a mere distraction, costing the company $59 million to pay for its internal audit over the past quarter. Also detracting from its profit was $102 million in stock option payments, the company said. Despite its troubles, Dell is making progress on a long-term plan to reduce its operating expenses, CEO Michael Dell said in a statement. The company will do that through layoffs, improved productivity, and investments in its infrastructure. In May,Â Dell announced it would lay off 8,800 people, about 10 percent of its workforce. Over the past quarter, the company has made a series of acquisitions, includingÂ ASAP Software, SilverBack Technologies, andÂ Zing Systems. In recent months, Dell has also made a major change in its business plan by augmenting its online direct-sales model with deals to sell its PCs through retail partners such as Wal-Mart in North America and South America, Bic CameraÂ in Japan, and Carphone Warehouse in the U.K.
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Suit alleges illegal kickbacks to Dell from Intel were concealed.
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(InfoWorld) - Dell will lay off 10 percent of its 78,800 workers, in a continuing effort to improve profits as the company also completes an investigation of accounting fraud, it said Thursday. Dell will make the layoffs over the next 12 months, including workers throughout its geographic regions, customer segments, and job functions, the company said in a statement. The move is part of a corporate cost review spanningÂ product developmentÂ and procurement,Â service, and support delivery. While layoffs are difficult, "we know these actions are critical to our ability to deliver unprecedented value to our customers now and in the future," company CEO Michael Dell said in a written statement. The company also announced it made $759 million in profit for the first quarter of its 2008 fiscal year, down slightly from the $762 million it earned for the same quarter last year. Dell reported revenue of $14.6 billion and earnings of 34 centsÂ per share, both well above Wall Street expectations of $13.95 billion in revenue and 26 cents earnings per share, according to analysts polled by Thomson Financial. Despite itsÂ success in beating the financial forecast, Dell also said it had spent $46 million in the last quarter on expenses for the investigation into accounting and financial reporting. Dell began an internal study of its books because of questions raised in 2006 by the U.S. Securities and Exchange Commission (SEC). Dell blamed that situation for its decision to file only preliminary results Thursday, marking the fourth consecutive statement that the company has not filed an audited, official earnings account. Those missing statements have also forced Dell to fight to keep its stock listed on the Nasdaq exchange, which requires all public companies to file audited Form 10-K papers in order to be publicly traded. Dell has already won several extensions of a deadline to supply those numbers, and on May 4 it asked for even more time to meet the conditions.
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Dell cut prices on some servers and PCs by as much as 22 percent because it&#39;s paying less for parts. The company will pass the savings on components such as memory and liquid crystal displays
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Dell Inc. Tuesday pointed to its adoption of processors from Advanced Micro Devices Inc. (AMD) for pushing it to US$677 million in profit for the third quarter, though the company has delayed reporting final numbers due to an accounting investigation by the U.S. Securities and Exchange Commission (SEC).
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Dell on Monday said it had cut prices by as much as fifth for a range of products aimed at US corporate customers, as the computer maker passed along savings from cheaper components.
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Just two weeks after revealing that some employees had falsified corporate revenue to meet earnings targets, Dell Inc. reported a profit of US$733 million for its fiscal 2008 second quarter, up 46 percent from its mark of $502 million for the same period last year.
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Gartner Inc. positioned Dell (NASDAQ: DELL) in the "Leaders  Quadrant" of its Magic Quadrant for Midrange  Enterprise Disk Arrays, 2H061 report, Dell  announced today.
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A trip by CNET News.com editors and reporters to Dell's headquarters in Texas yields a bonanza of information about the PC maker's plans and operations.
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About 4.4 million now under recall; firm says units can overheat, possibly causing fire or shock. NEW YORK (CNN/Money) - Dell Inc.
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Blog: A blog post at Consumerist.com offering tips on buying from Dell draws a nasty cease-and-desist letter from the company's attorney -- and then a chastened apology from a Dell manager.
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Dell said Tuesday that it would be eliminating rebates from its Dimension desktops and services in an effort to simplify pricing for consumers. The move means that the company would no longer use mail-in rebates on any of its products.
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Dell on Monday dropped prices on select servers, workstations, desktops, and laptops aimed at corporate customers, saying it was passing along lower component costs to buyers.
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Dell  said on Friday it received a letter from Nasdaq saying the computer maker was not in compliance with listing requirements because it was late in filing its fiscal third-quarter report.
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Plus: HP profit gains on cost cuts, cheaper components...Dell execs skewed numbers to meet earnings targets...Applied Materials posts lower quarterly profit.