PC vendor Dell Computer Corp.'s recent layoff woes are the result of over-ambitious recruiting efforts during the company's aggressive expansion in 1999, according to Chief Executive Officer and Founder Michael Dell.
Dell, speaking at a media event today in Hong Kong, maintains that the correction would have been more severe had the company not been performing well.
Dell Computer disclosed Monday plans to reduce its headcount by 10 percent, or 4,000 people. That announcement followed a similar one in February, when the vendor announced block redundancies for the first time in its history. The earlier announcement concerned 1,700 staff cuts.
Michael Dell today said that "99.9 percent" of the job cuts would be made at the company's Texas base and that Asia would not see layoffs. He added that Asia was a strong growth area for Dell, with China one of Dell's top three markets outside the U.S., together with Germany and Brazil.
Speculating on the possible timing of a rebound for the global PC market, the company founder pointed to the first half of 2002 as a likely turning point. He forecast that corporate users will begin to then replace the PCs that were purchased en masse in preparation for Y2K.
"We expect to see a sequential increase in the first and second quarters of 2002 over this year, but there are a lot of uncertainties as to when the recovery will begin. I do know that Dell will be growing faster than the market, we just don't know where the market will be," he noted.
Dell will fly to Xiamen, China, tomorrow to oversea the opening of expanded operations at the company's manufacturing plant there. In Asia, Dell has manufacturing operations in Malaysia and China.
Dell said the Xiamen operation has shown encouraging signs of growth, particularly with the shipment of PCs to Japan. He also made note of the trend among PC vendors globally to manufacture in Asia.
On China's WTO accession, Dell reiterated his stand that the company would like to see faster progress toward China's acceptance and that he was encouraging the process wherever possible.
According to Dell, the company does not have plans to make investments into the Mainland's telecommunications market when China's foreign investment laws for the sector are relaxed after WTO accession. Michael Dell invested in Mainland telecommunications company China Netcom during its US$325 million round of fundraising in February this year.