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Wed, Jan 07, 2009 - 03:46 PM EST  —  AAPL: 90.92 (-2.10, -2.26%)  |  NASDAQ: 1595.85 (-56.53, -3.42%)

Beleaguered Dell to close Austin PC plant, cut thousands of jobs in cost-cutting effort
Monday, March 31, 2008 - 06:23 PM EST

Beleaguered Dell said Monday it hopes to save up to $3 billion over the next three years via cost cutting and employee layoffs.

"The world's No. 2 computer maker said it will close its desktop manufacturing facility in Austin, Texas," The Associated Press reports.

"Round Rock, Texas-based Dell is also reaffirming its plan — announced last year — to cut at least 8,800 jobs, or about 10% of its workforce," AP reports. "In the last nine months of fiscal 2008, the company cut 3,200 jobs."

Full article here.

MacDailyNews Take: Instead of prolonging the misery, Mr. Dell should just shut it down and give the money back to the shareholders.


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Mar 31, 08 - 05:26 pm Comment from: Randian

If it weren't for Michael Dell's enormously fat mouth (with foot firmly inserted, still), I'd feel sorry for the company. However, and with that said, my present joy knows no bounds at this piece of news. Just ask Earl: Karma is a bitch.

Mar 31, 08 - 05:36 pm Comment from: Randian Logic

Common (Ayn) Randian logic to feel sorry for the corporation, and not for the workers in our world . . .

Mar 31, 08 - 05:39 pm Comment from: deepdish

Poor Dell.

He thinks adding color will make his computers cool.

Just another low price box company with terrible customer service.

I feel sorry for them.

Mar 31, 08 - 05:43 pm Comment from: Viktor

Funny, Steve jobs, in order to resurrect Apple, hired thousands of new employees and some new board of directors (it did fired Gil Armelio and some others, but not as much as Dell). And the company made money again with innovation and great products..... but Dell, they do not have great products or innovation, soy they can only fire employees to stay alive.

Mar 31, 08 - 05:49 pm Comment from: MCCFR

My thoughts go out to the employees who will pay the price for Michael Dell and Kevin Rollins' combined lack of vision.

Several years back, I once had an argument on a thread here that lasted the best part of three days with some joker who was convinced that Dell were an exemplar of a successful PC manufacturing and distribution operation: of course, in sheer numbers, my opponent appeared to have a point. However, if you actually had the ability to think in multiple dimensions, it was relatively obvious that the profitability of that volume was going to lead to problems.

Mar 31, 08 - 05:49 pm Comment from: iLuvMyMacs

It's never good when people are forced to the unemployment line due to incompetence. With that said...

Last one to leave please shut the lights off. Thanks Mikey.

Mar 31, 08 - 05:49 pm Comment from: trex67

Before we bathe ourselves in schadenfreude, please remember people are losing their jobs... Try some compassion on for size.

I despise peecees as much as any Machead, but these are real people.

Mar 31, 08 - 05:53 pm Comment from: ken1w

It's not a good thing when the only way Dell makes headlines these days is by announcing yet another cost-cutting measure.

> but Dell, they do not have great products or innovation

Dell's innovation was in reducing operating costs, to sell adequate products for less than everyone else. Now that everyone else has caught up, Dell can't do anything else but try to reduce costs even more. It won't work forever.

Mar 31, 08 - 05:55 pm Comment from: Mr. Reeee

Who cares about Dell?

They made their name as an efficient box stuffing operation and web store. Nothing more.

Their idea of innovation was to add a swoopy curve to the face plate of a generic PC box. Ooooh, impressive.

Eventually they will disappear. No tears shed here.

Mar 31, 08 - 05:56 pm Comment from: iDon't

Lay offs suck. Greed sucks too. If Dell is the #2 PC maker why do lay offs? Only good thing about Dell is that do manufacturing in the USA and not Tibet Killing China.

Mar 31, 08 - 05:57 pm Comment from: giofoto

This is not good for the "Weird City" (Austin)...in the economy we are already in. People wont me liking him or his wife. OUCH!

MDN Magic Word: RAN

They are going to wish they RAN away from Austin/Round Rock. smile

Mar 31, 08 - 06:02 pm Comment from: Rip Van Winkle

"iMac, bitch!!"

Mar 31, 08 - 06:03 pm Comment from: twodales

What Steve Jobs says in this situation:

"We've had one of these before, when the dot-com bubble burst. What I told our company was that we were just going to invest our way through the downturn, that we weren't going to lay people off, that we'd taken a tremendous amount of effort to get them into Apple in the first place - the last thing we were going to do is lay them off. And we were going to keep funding. In fact we were going to up our R&D;so that we would be ahead of our competitors when the downturn was over. And that's exactly what we did. And it worked. And that's exactly what we'll do this time"

That's why we are ahead.

Mar 31, 08 - 06:08 pm Comment from: TowerTone

Can you imagine the press Apple would get it they bought up some of this stuff? Not the computers, but any warehousing and distribution, and maybe even manufacturing for a new Mini-Pro final assembly.

I have no idea how Apple is set up for distribution around America, but I know they are going to be needing more and more.

Mar 31, 08 - 06:09 pm Comment from: Jay-Z

I feel bad for the thousands of people who trusted this jackass with their jobs and their livelihood. As happy as I am to see Dell go down in, it's bittersweet knowing these people will suffer but Michael Dell will still live the good life.

Mar 31, 08 - 06:10 pm Comment from: Reclaimer

I feel very badly for the people that will lose their jobs. I really and truly do.

But that smug bastard Mikey Dell won't suffer one bit.

However, this is a sign that people are buying more Macs and less and less of those crappy Dells.

Buy a Dell, burn in Hell!!

Mar 31, 08 - 06:36 pm Comment from: Dan The Man

My wife lost her job with Dell. I warned her to leave as the writing was on the wall. It is and always will be a piece of shit company with piece of shit products. I hope the company implodes and Dell is reduced to selling something else out of his garage like cactii or t-shirts.

Mar 31, 08 - 07:00 pm Comment from: Mac User since 1984

My wife and I just signed up for a Clear card, the TSA program that will supposedly let us get in shorter security lines at various airports.

The biometric system was encased in a fancy kiosk that ran on Windows XP and Dell machines. It took forever (and several reboots, I kid you not) for the system to collect our fingerprints and iris scans. At the adjacent kiosk, the poor souls had to unlock the whole kiosk and throw the power switch to allow a frozen system to reboot. (For some reason, between each person the system had to be rebooted....) I won't tell you the number of cryptic error messages the people manning the Clear booth had to click through to get the system to work.

Mar 31, 08 - 07:01 pm Comment from: Raymond from DC

Here's an idea. Apple could take over the facility, working with its OEM partners. Locals would have jobs making products they can be proud of, Apple would bring production closer to its customers, and I could buy an Apple product that's not Made in China. We could all gather round as the Dell sign comes down, and Apple's goes up.

Mar 31, 08 - 07:14 pm Comment from: *shudder**

Who's gonna build Dell desktops now? The same quality people who do their phone tech support?

Strong sell, baby.

Mar 31, 08 - 07:20 pm Comment from: @Raymond from DC

<b>YES!!!<b>

Should that happen, I'll be on site as well. smile

Mar 31, 08 - 07:29 pm Comment from: Me in LA

Give the money back to the stockholders, Michael.
You're toast.

Mar 31, 08 - 07:32 pm Comment from: macbones

hmmm. I like the idea of Apple taking over the facility and giving people jobs, if only because Apple, as much as I love Apple, is basically a front company for the Chinese industrial machine. Apple designs great products and then hires Chinese companies to build them. Chinese companies are likely paying their workers about $1.50/ day while Dell is likely paying the workers it's laying off $10-18/ hour. Plus benefits. So, Apple do share the wealth. Share it with the American worker. Build something in America.

Mar 31, 08 - 07:41 pm Comment from: bizlaw

I always think it's funny how companies believe they will "save money" by cutting employees. These "savings" assume that sales will remain at the same level or increase.

How will Dell keep producing and selling the same number of PCs with 8,000 fewer employees? Good frickin' luck.

Mar 31, 08 - 07:56 pm Comment from: Ron Robertson

Actually, Randian logic would focus on the individual, not the corporation, and what their accomplishments are/were. I'm not sure why you put that comment in there to begin with. What does Dell have to do with Ayn Rand anyway? Dell was very successful (financially) for a long time, but they're tied to an OS that's reached saturation, and is now going the other direction. The OS is very second-handed and lacks innovation compared to alternatives (particularly OS X), and his hardware is not technologically very impressive compared to other hardware. It's hard to imagine Miss Rand (or anyone) being especially inspired by Dell's products. At least HP and other Windows PC makers invent products, as does Apple.

Mar 31, 08 - 08:04 pm Comment from: @"Randian."

It is clear you've never read, and/or understood an Ayn Rand document, novel, or publication in your life.

STFU

Mar 31, 08 - 08:16 pm Comment from: bobchr

@ Raymond Nice thought but that may not work. All Apples chip foundaries and fabs and subcomponent manufacturers are over seas and economies of scale to move an assembly operation here would eat up much of Apple's 11 Billion in reserve with no future up[ side. Expanding customer service and repair is a possibility but you would only need 1/100 the workforce and 1/1000 the factory area. A better Idea Michael Dell Sell the facility to the Employees as a group, if there is any significant bandwidth among the lot of them they can figure out something really creative to do with the factory and their lives. The up side, A sale to the employees not only stops Dell from not hemmoraging 3 Billion over the next 3 years but may make them a profit. How about a general recycling center. There is a lot of money in garbage, the raw materials are local and if done right you can actually create energy while doing it.

Mar 31, 08 - 08:21 pm Comment from: Cubert

Looks like Mikey is finally taking MDN's advice.

Mar 31, 08 - 08:25 pm Comment from: Cubert

@Reclaimer,

"But that smug bastard Mikey Dell won't suffer one bit."

Wait, I thought we Mac users had the smug market locked up.

Mar 31, 08 - 09:00 pm Comment from: chesspiece

The heroes in Ayn Rand's novels were always creative individuals who refused to compromise their ideals, no matter the cost. The criticism of the media and lesser lights in their field had no impact on them because, ultimately, they would do would do what they felt was the right thing. In "Atlas Shrugged", the question asked again and again was "Who is John Galt?". Now we know. His real name is Steve Jobs.

Mar 31, 08 - 09:06 pm Comment from: John C. Randolph

"convinced that Dell were an exemplar of a successful PC manufacturing and distribution "

They were.

The problem Dell ran into is that once they started the race-for-the-bottom, and squeezed all of the margin out of the PC hardware business, they couldn't afford to make a quality product. There was a time though, when Dell really was the best in the commodity PC business.

-jcr

Mar 31, 08 - 09:20 pm Comment from: Name

Good. I feel sorry for all the people who lost their jobs, but I really do hate Dell.

Before I bought my mom a macbook she had a dell. It died on it's own (hardware failure) and destroyed all her report cards (she's a teacher), and got her in trouble with her boss (the VP). Dell made my mom cry, and I would like nothing more than to see it die. How can someone with such a large market share not have learned to make reliable hardware after all these years?

Mar 31, 08 - 09:47 pm Comment from: Randian

@Randian Logic

Feeling better now that you've stood up for the plight of the benighted "common man"? It's wonderful to be so sensitive and empathetic and open-wounded that you must never send to know for whom the bell tolls. Every man's bunion diminishes you, doesn't it, RL? Jeez, but how did you EVER make it through the demise of the Edsel, Ma Bell, and the Walkman? Truth is, every day someone's ass gets clobbered in the technological rat race, and that's too damned bad. I've been part of that equation, and (most likely) so have you at least once in your lifetime. However, bathetic (not to be confused with "pathetic") sentiments such as yours merely obfuscate the reality of competitive business models and the survival of the fittest in the East and West. The majority of my close friends at the Austin plant will survive this painful transition because they must, and they will be the stronger for the experience. As have I been . . . and, probably, you.

'Nuff said.

Mar 31, 08 - 09:49 pm Comment from: rwinters

the incredible shrinking Dell! I don't think things will get better soon. It's HP, Lenova, and Apple nipping at their heals and stealing market share.

Mar 31, 08 - 09:52 pm Comment from: shen

actually, Randian and logic are not words you can use together. Drop it.

While I would love to see Apple start making everything in America, and I see the temptation, I am not going to hold my breath. That is one of my few problems with Apple and the only thing that Dell did right.....

Mar 31, 08 - 10:46 pm Comment from: Chuch

Layoffs are NOT to save money. You lay people off because you have no work for them to do. This is only a sign that sales are down, and there is no expectation that they will improve. Bad for Dell. Another sign that the American economy is in the trash bin.

Mar 31, 08 - 11:05 pm Comment from: Al

Don't worry about Dell's laid off workers. We live in an era where people will hold several different jobs between High School and retirement. The days of being at one job throughout your working life are long gone.

Retrain, move to where the jobs are and start over. That's life nowadays.

Mar 31, 08 - 11:25 pm Comment from: Crabs

@Viktor

Funny, I thought of the exact same thing. When Apple's in trouble, they either hire more people, or simply hold onto the ones they have. In fact, I think I remember reading about something Steve Jobs said about not making layoffs, buckling down, and trying to stay innovative, and then Apple began its phoenix-like rise from its ashes. Dell (and almost every other company there is) sacrifices their employees financial security first, and only at the very end would they even consider putting their own finances at risk. I hate corporations. It's really quite sad that they more or less run the country.

Apr 01, 08 - 12:01 am Comment from: Jubei

Well thats what he gets fro talking smack back then. Seems to be a pattern here. The companies that bad mouth Apple and dismiss them as irrelevant seems to get their butt bit by it.

Apr 01, 08 - 02:30 am Comment from: almux

This is really a bad taste 1srt april's joke!!

Apr 01, 08 - 03:31 am Comment from: Randian Logic

The irony of your misinterpretation of my post is that it led you to an archetypal restatement of Randian illogic that bemused me in high school, and amused me at college. (Forgive my bathos, Randian . . . )

Re-read what I wrote- I did not, as you suggest, "[stand] up for the plight of the benighted 'common man'". (For reasons, probably both good and ill, I do not commonly do that- I am not, as you expressed, 'sensitive', 'empathetic', or easily 'open-wounded'; quite the contrary, I think.) In fact, in the single statement that I made, I did not offer any suggestion as to my own views about any damn thing in this whole damn world, and you have, therefore, made overly (and poorly) connotative assumptions as to my 'feelings'. Or am I wrong? Use your Randian logic to 'show' MY feelings WITHIN my statement. My Formal Logic classes would suggest that such guesses are overly presumptive.

All I said was that your argument-opening statement was Rand-Typical, and it was such- and so was your follow-up: "sentiments such as yours [mine] merely obfuscate the reality of competitive business models and the survival of the fittest in the East and West." Not true! I want NO REALITY obfuscated, which is why I detest any Darwinian valuation/understanding of the 'competitive business model'. 'Survival of the fittest' equals 'survival of the best'? Hell, no. Survival and quality have no necessary connection; I can dream that some day they will, but, in the interim, I admire quality, whether it survives or not- and not simply survival itself. That's why I admire Apple and, more-so, Steve Jobs. I think he's closer to Aristotle's Great-Souled Man than to anything Rand ever contrived.

Apr 01, 08 - 05:02 am Comment from: macaholic

As for Dell building in the US versus Apple doing it overseas. Aren't the components (or a large part of them) built overseas anyways. Only assembly being done in USA?

Apr 01, 08 - 06:44 am Comment from: schadenfreude

12/84, 512K "fat" mac and ever since but people losing jobs is no fun. so, sometimes, MDN, it is time to stfu.

Apr 01, 08 - 07:04 am Comment from: Real World

"There was a time though, when Dell really was the best in the commodity PC business."

It isn't a problem of Dell getting noticeably worse. Rather it's competitors are getting noticeably better at building low cost PCs. The move in volume isn't Dell->Apple. the move is Dell->HP. Does that make any difference to Microsoft's dominance and Apple's distant 2nd place in the OS race? Not really.

Apr 01, 08 - 07:24 am Comment from: dix99

Let us remind Mr Dell of his 2001 comments, shall we.

http://www.macobserver.com/stockwatch/2001/05/18.1.shtml

Apr 01, 08 - 07:36 am Comment from: Dude

This never gets old!



Another famous Michael Dell quote:

Q: What is the future of Apple Computer?
A: Silicon Graphics

Now, maybe it should read:

Q: What is the future of Dell?
A: Silicon Graphics

Rot in.... well... Texas, there Dell!

Apr 01, 08 - 07:38 am Comment from: 32 yr old

Dell assembles some of its peecees in Texas - Dell makes nothing - not even money it seems. Its recently closed call centers in Oklahoma and Alberta were completely funded by taxpayers.

The good news is that Apple announced several months ago that it was dramatically increasing the size of its facility in Austin.

Apr 01, 08 - 09:23 am Comment from: Jobless in Austin

Who cares? When you sup with the devil, best use a long spoon, something Dell's slack-jawed, drooling minions now out of work should have remembered in the first place.

My sympathy extends as far as it does for Russian spammers.

Apr 01, 08 - 09:51 am Comment from: Blue Dream

Thanks again, Michael Dell, for predictably cutting the American jobs instead of the jobs in the far east. It's just like you, pal, to do that.

Apr 01, 08 - 10:11 am Comment from: Another IT Guy...

Dell's failure in the marketplace has little to do with hardware and everything to do with service...or the distinct lack thereof. My entire organization--12k employee company--switched from Dell to IBM over the course of two years, due to a series of unacceptable service incidents. With IBM, we got no excuses, no incompetence and no support hassles and when something failed, techs are on-site in under four hours. Dell just hasn't executed where it matters most to them--in the enterprise.

Sad that people are out of work, but can't say I'm surprised at Dell's fortunes as of late.

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