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Mon, Mar 22, 2010 - 07:48 AM EDT  —  AAPL: 222.2499 (-2.4001, -1.07%)  |  NASDAQ: 2374.41 (-16.87, -0.71%)

Beleaguered Dell asks workers to take unpaid leave in latest effort to slash costs
Tuesday, November 04, 2008 - 04:43 PM EDT

A memo to all Dell employee from CEO Michael Dell asks workers to consider taking up to five days of unpaid time off to help prevent more layoffs. It's the beleaguered PC box assembler's latest effort to squeeze blood from a stone.

The Austin Business Journal reports, "According to spokesman David Frink, the memo from CEO Michael Dell says the new program calls for a temporary companywide hiring freeze, the elimination of contract employees, severance packages to those who depart voluntarily, and a voluntary furlough of one to five days. The memo also states that more layoffs may be necessary if the other elements of the program do not achieve enough cost savings. Frink declined to say how much money the company hopes to save via the program."

Full article here.

[Thanks to MacDailyNews Reader "CheekyGit" for the heads up.]

MacDailyNews Take: Looks like Mikey's going to have to make due with fewer painted craptop lids. But, what about Enderle's yes-man, er... "consultant" fees? Hey, maybe Mikey can make it all up in volume? smirk

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Nov 04, 08 - 05:49 pm Comment from: Jubei

I guess they are not coming out with DELL DJ Ninny Part Deux.

Nov 04, 08 - 05:52 pm Comment from: Wandering joe

Work for free producing what...? poor employees

Nov 04, 08 - 05:54 pm Comment from: Micro Me

Maybe he could sell the shareholders and give them back to the company.

Nov 04, 08 - 05:54 pm Comment from: steve516

Wow... what a dramatic turn of events over the past 10 years. I would feign surprise, but really... With Steve at the wheel, we knew something of this sort would happen.

Nov 04, 08 - 05:55 pm Comment from: Jimithy

We're going to see more and more stories akin to this in the coming several months as Apple gains market share and less people feel the need to buy these $400 disposable PCs.

Nov 04, 08 - 05:56 pm Comment from: bobchr

At least they are showing some kind of compassion for their staff and giving them a choice. Maybe one of them will actually come up with a decent idea to save the company. It for damn sure Mike Dell was tapped with the whole supply chain idea. Skate to where the puck is gonna be and it ain't net appliances

Nov 04, 08 - 05:56 pm Comment from: PK

In all of this, we have to keep in mind that this is a very tough time for the Dell employees and must feel for what they are going through. No matter how much I prefer Apple over Dell, this is a huge loss to all that are working at Dell.

Nov 04, 08 - 06:01 pm Comment from: dave

In order for Dell to free up enough cash for my bonus, a bunch of you will either have to take unpaid leave or I'll have to lay a bunch of you off. But I'm going to get my bonus!

Nov 04, 08 - 06:01 pm Comment from: iDon't

I don't like Dell PCs but there will be a lot of real people getting hurt. I live in Round Rock TX and have many friends that work at Dell. Dell sells a lot PC but their margins are very thin and their tech support is a very high overhead expense.

Nov 04, 08 - 06:05 pm Comment from: Passerby

@Dave

If Mikey does take a bonus this year, that will be a very, very bad sign for the company. Sell whatever stock you have left. Take the severance package if you're an employee. But get out while you can.

Nov 04, 08 - 06:11 pm Comment from: Gabriel

Circling the bowl... hope some of the folks working at Dell can find jobs elsewhere.

And bobchr makes a good point that Dell is indeed handling this better than I'd have given them credit for, all things considered.

Nov 04, 08 - 06:26 pm Comment from: Thinker

@ Passerby & Dave,
Hopefully, Mr. Dell is ethical enough to not take a bonus when his company is in such turmoil. He reportedly uses a Ubuntu-based laptop as his main computer. Ubuntu is also a philosophy... a way of being.

According to Desmond Tutu, "A person with Ubuntu is open and available to others, affirming of others, does not feel threatened that others are able and good, for he or she has a proper self-assurance that comes from knowing that he or she belongs in a greater whole and is diminished when others are humiliated or diminished, when others are tortured or oppressed."

Nov 04, 08 - 06:38 pm Comment from: Wha

I feel so much Ubuntu for Dell employees.. wish yas only the best. Maybe you can find some work in Cupertino?

Nov 04, 08 - 06:41 pm Comment from: Randian

According to Desmond Tutu, "A person with Ubuntu is open and available to others, affirming of others, does not feel threatened that others are able and good, for he or she has a proper self-assurance that comes from knowing that he or she belongs in a greater whole and is diminished when others are humiliated or diminished, when others are tortured or oppressed."

Yeah, just like Nature. (You know, the model for all things social in the Western world. The very same place in which a single rule prevails: ONE EATS OR ONE IS EATEN, with absolutely no regard for the greater whole or the needs of the commune.)

Samuel Butler titled his famous novel "Erewhon" with one purpose in mind: To underscore the fact that paradise exists "Nowhere." God bless Bishop Tutu, but his words are ephemeral and puerile . . . as is Ubuntu.

Nov 04, 08 - 06:47 pm Comment from: drackmere

Working in the Valley, as I presume a great many of MDN readers do, this is just the tip of the iceberg. All of us, whether in networking, software, hardware, telecom, etc. are starting to sweat, and contractors especially (being one myself). Having been the recipient of several layoff notices, I only wish the best to the employees of Dell, and hope they are able to find work in other areas of the tech industry. No matter what anyone thinks of Dell computers, those employees have families, and I wish only the best for them.

Nov 04, 08 - 06:52 pm Comment from: twilightmoon

Of course Michael "Sell the company and give the money to the shareholders" Dell will save his beleaguered company from ruin by his timely return by innovating his way out of the companies problems, and investing in the future...

Hey that other guy did it, why can't he? It can't be that hard can it?

Nov 04, 08 - 07:05 pm Comment from: Macaday

Volume is vanity. Profit is sanity.

Dell's ditched. Apple's ascendent.

And Microsoft..?

Nov 04, 08 - 07:18 pm Comment from: Spork

1st I hope the Dell worker and their families are ok when Dell kicks the bucket.

But they won't be because CEOs and 'upper management' pay them selves way to much.

Every time you buy a Dell a baby seal dies.
WTF is any one really surprised?
Dell got drunk with M$ and after all the fun M$ date raped them with Vista.

M$ is a predator not a NatGeo type predator but a Hannibal Lector type predator

Nov 04, 08 - 07:30 pm Comment from: HMCIV

Mayor Quimby: Simpson, you idiot! You spent your entire year's budget in a month! Your department's broke!
Michael Dell: Uh...oh no! Wait! I think I've got the perfect solution.
Mayor Quimby:: You'd better! Because those garbage men won't work for free!
Michael Dell: D'oh!

Nov 04, 08 - 07:45 pm Comment from: Mark

Hey Mikey! How about taking one for the team? You could start by cutting your salary and those of your board of directors by 50%. No, you say! Why not? It's greedy, overpaid CEO's like you, your high class friends, and the tyrants in Washington who got us in this mess. The time has come for you, your friends and the politicians in Washington to show a little intestinal fortitude and take responsibility for your mistakes. Get off the backs of your employees Mikey, and clean up your own mess. And with any luck the people will wake up and fire the entire lot of incompetents occupying Washington.

Nov 04, 08 - 07:45 pm Comment from: FUDsucker Proxy

Maybe if they stop stocking paper towels in the washrooms?

Oh yeah, that's a Ballmerism. wink

Nov 04, 08 - 07:55 pm Comment from: bizlaw

@ Thinker:

Ubuntu also applies to someone who didn't pay a fortune for a Windows license.

Oh, wait, I think Microsoft's contracts to box makers like Dell state that you have to pay a Windows license fee whether Windows is installed on the PC or not, so Mikey actually paid the fee for something he's not using.

Gee, I wonder why his company is having trouble?

Nov 04, 08 - 08:03 pm Comment from: some choice

At least they are showing some kind of compassion for their staff and giving them a choice.

Compassion? The choice is:

1. Volunteer to take time off without pay.

2. Be told you're taking time off without pay.

Next up: Dell will expect employees to put in time for free, ala Wal-Mart.

Nov 04, 08 - 08:26 pm Comment from: Me In LA

While I hate DULL and Mikey, don't gloat over more Americans losing jobs...you could be next.
I can laugh with the best of you, but people losing jobs sucks.
And it ain't gonna change 'cause Obama gets elected either.
Count on that.
We need to level Capitol Hill.
Period.

Nov 04, 08 - 08:46 pm Comment from: Noodle-Armed Choir Boy

@Randian
"Nature. ( ... the model for all things social in the Western world. The very same place in which a single rule prevails: ONE EATS OR ONE IS EATEN, with absolutely no regard for the greater whole or the needs of the commune.)"

You're confusing some Ayn Randian fiction with the reality of the natural world.

In nature, the species which work well together have the best chances of survival.
Wolves survive in packs. Lions in Prides.
Lone ants hanging out their own hill? Never.

And yes, even humans need each other to survive.
And the that better humans work together, the better their quality of life.

Maybe the acceptance of this fiction of "Must Step On Each Other To Get Ahead" is a contributor to someone's tough economic times right now.

Nov 04, 08 - 09:11 pm Comment from: twilightmoon

Spork "But they won't be because CEOs and 'upper management' pay them selves way to much."

I like Steve Jobs answer: believe in your company, take a symbolic $1 a year salary, and earn your pay by growing your company's net worth and get your pay with options.

Would you agree with that System, Spork, or do you think that executives should get low pay regardless of their performance?

Nov 04, 08 - 09:18 pm Comment from: jerry

how about the novel concept of slashing executive compensation?

Nov 04, 08 - 09:51 pm Comment from: Greg L

It just goes to shows you why manufacturing is going to China: Americans just don’t appreciate, fine, high-quality, American-designed, premium-label products like Dell any more.

Yeah, I’m joking.

Nov 04, 08 - 09:58 pm Comment from: No kidding

to several of you guys. Wouldn't it be sad/fitting if corporate greed were directly responsible for Dell's undoing? So much for that everyman image they used to push on us with the Dell Dude. If they were truly honorable, when the time came to dissolve the company they would make SURE their employees were all taken care of. Anyone that has stuck with this crappy-ass company through years deserves something back. Man, it ain't right.

Nov 04, 08 - 10:12 pm Comment from: bobchr

@some choice
At some companies like one that I worked for from 1987 to 2001 we were given no warning . Many of us that watch the company grow from $10M to $1.4B were summarily dismissed as our jobs were outsourced. These people still have a job, albeit with a slight pay cut. They still have their benefits and the ability to move to another company in the industry or in their specialty. Although I received 6 months severance and had 280 hours of vacation time comming, I could not find a job in my field and had to temporarily change careers at a hugely reduced salary. In 2003 I started driving for a car service and living off tips.

Unable to keep up my mortgage payments I eventually had to sell my house which I had owned since 1986. I have since studied and go my PE license and only within the last 8 months started regaining my earning power at the point I had in 2001. So yes these people have ooptions I was not afforded. One to Five day furlough is less than a 2% reduction in salary. If Mike Dell has any conscience he and his execs will take at least a 5% pay cut and no bonuses. It's easier to find another position from a company you're still working for than from a Placement firm . I kniow this from personal experience.

Believe me things could be and may get a lot worse for them. The hand writing is on the wall. They can either take notice or get thrown out with the trash. As one who was buried under the garbage heap for 5 years before regaining my earning power I can say from personal experience, they have better choices than I did.

Nov 04, 08 - 10:37 pm Comment from: qka

Is Enderle one of the contract employees to be cut?

Nov 04, 08 - 11:34 pm Comment from: @Mark

Hey Mikey! How about taking one for the team? You could start by cutting your salary and those of your board of directors by 50%.

The guy at the top has the luxury of shitting on everyone below.
Welcome to the corporate world.

Although at WELL MANAGED businesses, executive compensation reflects the company's performance. And I don't mean eight-figure bonuses on top of equally large salaries either...

In a perfect world, when a company needs to trim back, the brass gets trimmed as well. Unfortunately the world is not perfect.

Nov 04, 08 - 11:42 pm Comment from: @bobchr

Man, pretty much everything about that blows. I sincerely hope things are on the up and up for you again.

Nov 04, 08 - 11:57 pm Comment from: bobchr

Yeah pretty much. I have an outsource proof position in a growth industry and more employment opportunities than I have available hours in the day. These days jobs come looking for me. Back in 1998 Dell raided that company I used to work for and took a lot of young talent and made executives out of most of them and junior execs out of the rest. I hope they all land on their feet. The company I used to work for has been taken over by Motorola and is one of their few bright spots. As a mater of fact they manufacture the scanning palm pilots used in Apple stores for POS. If you're diligent what goes around comes around.

Nov 05, 08 - 12:41 am Comment from: ZachCube

Oh don't worry Dell. With America's greatest best God Damned thing since ice cream "Hussein Obama" you will be entitled to others wealth. Like Apple's. Way to go Steve P Jobs

Nov 05, 08 - 03:09 am Comment from: Bob

@Noodle-Armed Choir Boy
Just because someone chooses to use the name 'Randian' as a pseudonym doesn't imply that they accurately represent the philosophy of their namesake. Ayn Rand was an advocate of voluntary cooperation, it is her leftist critics who have attempted to equate opposition to involuntary controls and forcible 'cooperation' with opposition to cooperation as such. Just for the sake of balance however I should point out, that were human beings (uniquely rational and volitional animals) to take their cue from the sort of creatures you recommend, wolves live in brutal social hierarchies that systematically abuse and torment those of lower social status, while lions regularly kill the offspring of competing males and live parasitically off the lionesses, Jack Jumper ants are both deadly to humans and solitary, mutually hostile insects. It is the degree to which human behavior is governed by reason, not cooperation that predicts positive outcomes individually and societally.

Nov 05, 08 - 08:06 am Comment from: Rob

Here's an idea Mikey, how about asking people to take permanent vacation and give the money back to investors.

Nov 05, 08 - 08:16 am Comment from: Crabapple

It's Occam's Razor Stupid! Micheal Dell You should have exercised Occam's Razor before spending so much money trying to create a rival to iTunes and the iPod.

I sympathise with all his employees of whom have worked very hard to provide computers aimed at all levels of financial ability, I do not sympathise with him because his decision making has been seriously flawed of late now that Dell's salad days are indeed gone.

Nov 05, 08 - 09:23 am Comment from: chaz

Well

Given that Dell only MFG's and doesn't do the software side, they are severely hamstrung. As Steve said, it's always been about the software. Dell is in a tough spot and I don't see how they innovate out, because they aren't an innovative company, and don't make the innovative products they package. If they want to get into that game now, it's a bet the company move, and they have to hit 10 out of 10.

Nov 05, 08 - 09:34 am Comment from: @Bob

Thank you for commenting on Noodle-Armed's comment regarding Ayn Rand. I don't know that the OP was truly making a statement about Rand's philosophy or not, but if so, it was sorely off the mark.

Nov 05, 08 - 10:48 am Comment from: HxB

Hey,

here's another idea, kill H1B and H2B Visas.
Lots of people are loosing their jobs while we have hundreds of thousands of HxB workers.
Here in the Triangle, companies like Cisco, IBM, Credit Swiss, are flooded with Indians, IT departments and surrounding neighborhoods look like Bombay.
It's time to clean up this mess and send them home.
Instead of paying OUR workers unemployment, how about paying for their training in another field and giving them jobs that are currently occupied by HxB visa workers?

I work with Indians and I see what's going on, it's disgusting.
This brings me to another issue: Newborn should get nationality of his mother, not automatic US citizenship.

Nov 05, 08 - 10:51 am Comment from: Al

Dell has to provide the tech support for Microsoft's software problems. That is their biggest expense. It's eating them alive.

Once Microsoft has killed off all of their major manufacturers with their shoddy software, where will their 95% market share be then?

Nov 05, 08 - 12:22 pm Comment from: drmacnut

CEO Mr. Dell should work for his company for now without pay, at least until a turnaround happens. I feel sorry for those employees, as many others have said, because they are just ordinary people like ourselves trying to do their jobs as asked. I am not saying layoffs and voluntary off time shouldn't be effected, but Dell should also do the same.

I imagine Mr. Dell's pocketbook could handle his working for free for 6 months until they get through some restructuring.

Nov 05, 08 - 12:36 pm Comment from: GizmoDan

Dell: "We loose money on every deal, but we make it up in volume."

Nov 05, 08 - 03:36 pm Comment from: bobchr

@Chaz
Dell has Linux offerings, they could have chosen the path Apple took but they chose to make their focus hardware only. Apple learned their lesson during the days of Visicalc. "It's the software". Dell chose the outsourcing route and to become the focal point of drop ship commodity assembly. All Mike chose to do with his company was continue what he did from his dorm room in college which was assemble commodity boxes as cheaply and efficiently as possible. Wringing out supply chain costs is a one trick pony which doesn't give you time to innovate or add value because you're too busy counting the money in the boom times. Apple chose not to make commodity pieces despite many cries from their customers and competitors to do so over the years. For the moral of this story see the fable of the grasshopper and the ant.

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