Dell has posted a slump in profits for the full year ended 30
January, and it now plans to make a further $1bn in annual cost
savings by 2011.
The firm is already conducting a $3bn annual cost savings
programme by 2011, which has led to thousands of axed jobs. Dell
now says the cost saving target is $4bn annually, meaning more jobs
will go.
Michael Dell, chairman and chief executive, said: "A lot of IT
spending is being deferred until there's better economic
visibility."
"Within our business, we're being very disciplined in managing
costs, generating profitability and cash flow, and investing in
ways that separate Dell from others today and when the economy
inevitably improves."
Brian Gladden, Dell's chief financial officer, said: "We said
last March that we would reduce costs by $3bn annually by the end
of fiscal 2011.
"The cost actions we took this past year made us more
competitive and delivered value to customers in a challenging
economic environment. In fact, we now have a clear view to
additional opportunities, and are raising our cost-reduction target
to $4bn."
For the full year, Dell's sales were static at $61.1bn. But
operating profits were down 7% to $3.1bn, and net profits were cut
by 16% to $2.4bn. Earnings per share slumped 5%.