Updated from 11:45 a.m. ET
confirmed today that it will eliminate about 1,700 regular full-time positions, or 4% of its workforce, mostly in administrative, marketing and product-support functions in its central Texas operations.
The Round Rock, Texas, PC maker said the job cuts "will help extend its fundamental competitive advantages despite soft global economic conditions and overall demand for computer systems." The company said many of the reductions were necessary because of the overlap created by the recent reorganization of several business units. Other cuts are being made because of a lower outlook for growth in the industry and for the company.
Shares of Dell rose $2.06, or 9%, to $25 in recent
Initial news of the job cuts broke
last week as the company told its managers to expect an 8% to 10% workforce reduction, according to published reports. Some employees were fearing the company might cut up to 4,000 workers.
Dell isn't the first company in the hardware sector to address the industry slowdown with job cuts. In recent cost-cutting measures both
said they would be handing out pink slips. Gateway said it was laying off about 10% of its workforce, while H-P set plans to cut less than 2% of its employees, covering about 1,700 workers, although the company said the exact number hasn't been finalized yet.
Dell is scheduled to report earnings for the fiscal fourth quarter today after the bell. Twenty-one analysts polled by
First Call/Thomson Financial
are calling for the company to earn 19 cents in the quarter. In late January, Dell issued its
most recent warning, saying it would miss fourth-quarter estimates for both earnings and revenue. Dell said sales would likely fall $100 million to $200 million below the $8.7 billion figure that had been previously forecast.