Dell plans major restructure

6 Feb 2007

A leaked memo has revealed that returned Dell CEO Michael Dell is planning sweeping changes at the company he founded, with plans to reduce the numbers of managers in the company.

The memo indicates that he plans to remain CEO at the company for the next several years.

He also plans to trim the number of managers reporting directly to him and eliminate bonuses at the company.

Over the past year the company has lost its No 1 spot in the global PC business to HP as well as dealing with a cycle of poor financial performance and an SEC investigation into accounting practices at the company.

It emerged last week that Dell was stepping back to the helm of the company after the resignation of previous CEO Kevin Rollins, who it is understood was under pressure from shareholders to resign.

In the memo Dell, who returned as CEO last week, made it clear that he wanted to stamp out needless bureaucracy at the company and out-of-control operating expenses.

Such a move was necessary, he said, in order to offset the spectre of job cuts at the company.

“We have great people,” the memo read, “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! I am asking each of you to look across your organisations and eliminate redundancies.”

It is understood that Dell intends to reverse his company’s flagging fortunes by focusing on the small and medium-sized business sector, enterprise servers and storage, shorter design times for new products and increased sales in emerging markets.

“There is no luxury of time,” he said. “The competitors are fierce. The difference is this time we have many new assets and some hidden ones that can be brought out. When I started back in 1984, it was just me. But now we are blessed to have an awesome team, many great assets and US$11bn or so.”

Dell, which sells computers, servers and peripherals on a direct basis, employs over 4,000 people between Cherrywood in Dublin and Raheen in Limerick.

By John Kennedy