Originally created 02/10/01

Report: To cut costs Dell may lay off staff

NEW YORK -- Dell Computer Corp. reportedly has told managers to prepare for significant expense cuts that could result in the first layoffs in the company's 16-year history.

The computer manufacturer is seeking to cut expenses between 8 percent and 10 percent, The Wall Street Journal reported Friday, citing people familiar with the directive.

Faced with sluggish growth in personal-computer sales and an overall slowdown in the U.S. economy, the Round Rock, Texas-based company has already initiated a hiring freeze, reduced its marketing budget and limited travel.

Earlier this week, it announced it was shutting down its 4-month-old online marketplace, set up to sell its own computers as well as products from select companies to other businessees.

Some employees believe the computer maker could be preparing to eliminate as many as 4,000 positions beginning as early as next week, the Journal reported.

Dell denied late Thursday that it had plans to lay off workers or announce job cuts.

"We're not making an announcement," said spokesman Jim Mazzola. "We would certainly announce or communicate to you if something like that were going to happen."

Dell, which has about 39,500 employees, is in a mandatory "quiet period" prior to its earnings release next Thursday.

Earnings for the three months ending Feb. 2 are expected to be 18 to 19 cents per share, down from the 26 cents the company originally expected. Revenue for the quarter will total $8.5 billion to $8.6 billion, 1 percent to 2 percent lower than expected, the company said.


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