Dell stocks collapse after trading update

Shares in Dell have taken a battering; falling to their lowest level in years after the vendor reported it too was seeing softening demand in the current quarter.

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The news comes at a troubling time for technology stocks,which slipped this week in response to the growing banking crisis in America, and news that Hewlett-Packard is to cull over 20,000 staff after integrating EDS.

Speaking at a Bank of America conference in the US,Dell CFO Mike Gladden said: “We saw a very weak August, weaker than usual. We haven't seen it snap back.”

Dell does not make financial predictions on principle, and still expects to grow ahead of the market this quarter. However, in a statement it said it expected to “incur costs” as it realigns its business to improve competitiveness, reduce headcount and invest in infrastructure and acquisitions.

Dell’s most recent quarterly figures from last month showed a 17% year-on-year slide in profits to $616m.

Dell’s woes echoed yesterday’s trading statement from Ingram Micro in which the distributor claimed that after the slack summer months, it had seen no sign of the traditional September recovery.