Dell to close Austin computer factory, lay off thousands worldwide

09:06 AM CDT on Tuesday, April 1, 2008
By ANDREW D. SMITH / The Dallas Morning News
asmith@dallasnews.com

Dell Inc. expects to save $3 billion a year by closing a desktop computer factory in Austin and laying o
Dell to close Austin computer factory, lay off thousands worldwideff thousands more workers around the world, the company announced Monday.

The Round Rock, Texas, computer maker reiterated its intention to cut at least 8,800 jobs – about 10 percent of its workforce worldwide. It has already cut about 3,200 positions in the past three quarters.

Dell will close its Topfer Manufacturing Center by Jan. 1, cutting about 900 of its 17,500 Austin-area positions in the process.

"The actions Dell will take during fiscal 2009 and beyond are expected to position the company to further accelerate growth in its five focus areas: global consumer, enterprise, notebooks, small and medium enterprise and emerging countries, while improving profitability and cash returns," the company said in a statement that came after markets closed.

"In addition, the company will take further actions to reduce total product costs across all areas, including design, manufacturing and logistics, materials and operating expenses. Dell expects that the initial benefits from these actions will begin to be realized in the second half of this fiscal year."

The $3 billion savings come to more than 5 percent of annual operating expenses for Dell, which has come under pressure from investors and analysts to cut costs.

And further steps are under consideration.

For example, Dell will decide by the end of the third fiscal quarter whether it should sell its Dell Financial Services unit.

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