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Dell under pressure to cut Irish jobs



DELL is under pressure to cut its global workforce by 15%, or some 13,500 jobs, and government sources concede it is likely that its Irish operation will be affected.

Wall Street analysts are increasing pressure on struggling PC manufacturer Dell to make significant job cuts across the board. Bernstein Research released a report calling for redundancies.

"We believe a 10% to 15% reduction would be a reasonable goal, " analyst Toni Sacconaghi wrote in the report.

Last week Business Week, under the headline 'Dell:

Pulling out the Pink Slips?', reported that Dell is undergoing a company-wide reorganisation that will see business units merge, "suggesting that pink slips may not be too far behind".

Dell employs 4,300 in Ireland. Officially the company says it has no plans to reduce its headcount.

"That's absolute speculation and we don't comment on speculation, " a Dell spokeswoman told the Sunday Tribune. However government sources said they were bracing themselves for bad news from Dell.

The news comes after more than 650 lay-offs in Irish manufacturing were announced or confirmed last week.

Dell accounts for 4% all goods and services purchased in Ireland and is the Republic's largest exporter. Its factory in Limerick is though to be worth 16,000 jobs to the midwest.

In the most recent quarter, Dell's revenue was down over 5% on last year while staffing was up 26%. Also the company's headcount grew by far greater levels then revenue over the last two years and operating expenses have been greater then revenue growth for virtually throughout the past two-and-a-half years.

Dell's global staff increased by 27,000 (49% ) in the past two years. Most of the employment was in Asia but 420 jobs were added to its operations here.

Worryingly for Ireland, analysts are saying the job cuts would be likely to come in manufacturing rather than sales and that the company seems to have a particular focus on Asia.

"Reducing customer service and tech-support staff would also be a tough call because of Dell's recognised need to improve service, " according to Cowen & Co analyst Louis Miscioscia. "Dell would be hard-pressed to cut jobs in IT services, a peopleintensive business that it has resolved to expand."

Dell's recently hired president of global operations, Mike Cannon, is said to be particularly "adept with Asian manufacturing", according to technology researcher Roger Kay of Endpoint Technologies Associates. "It's my speculation that because of his orientation, he may look to shift more manufacturing to Asia."

Last week Bourne Electronics, Thomson Scientific and Zomax/IMPO joined Proctor & Gamble and Motorola on the list of those who would be closing or downgrading their Irish operations.

"There is definitely a pattern emerging of jobs leaving Ireland because costs - and it's not just wages - are spiralling out of control, " said Tipperary Fine Gael senator Noel Coonan. "Costs across the board are gone out of control and it's communities like Nenagh that are suffering."




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