is missing the point.
The computer maker's answer to slowing growth is to look for ways to
, including involuntary "vacations." It's the classic response of corporate America in a downturn -- take it out on the workers.
Don't get me wrong. There's nothing wrong with running a lean, efficient organization. That's what investors expect and deserve.
But even after the previous round of job cuts, Dell is earning only about $33,000 in yearly net income per employee.
employs almost twice as many and earns about $42,000 per employee. And
staff is a fourth the size of Dell's and earns about $162,000 per employee.
So, clearly the issue isn't the raw head count. The bottom line here is that consumers aren't happy with Dell.
In the consumer goods industry, only two things matter: price and service. Those two combine to form a customer's perception of value. If people are buying fewer Dells as rivals gain ground, it's because they see better value elsewhere.
Internet message boards are awash with consumer complaints about Dell's poor customer service. That's amazing, considering that Dell built its business as the standard-setter for service.
If Dell wants to return to its past glory, it had better keep enough people to answer the phone when a customer calls.
For the record, Dell takes issue with my interpretation of their request that employees take time off without pay as an involuntary vacation.
Nevermind the implied pressure of the cost cutting mandate and the buyoffs or the lingering fear of layoffs after a recent round of job cuts. Dell insists these are all voluntary actions.
Here's what David Frink from Dell's corporate affairs office had to say:
Re your piece, "Today's Outrage: Dell's Required Vacations," yourtake is simply incorrect. As any prudent company during the current economicuncertainty, we're implementing a program to better position Dell for long-termcompetitiveness, which includes reprioritizing projects, capital spending, reducing travel costs and services spending on non-critical projects. We also have a short-term hold on hiring and are offering employees a voluntary opportunity to take 1-5 days of unpaid time off in our 4th quarter. It IS NOT involuntary. We're using voluntary cost-reduction options so that fewer involuntary actions will be necessary. I'm glad to discuss these programs with you, and ask that you correct your column.
Frink acknowledged, however, that involuntary action may also be necessary.