Dell to Cut $2 Billion Within 3 Years
By Charlene Cooper | Jun 14, 2012 02:21 PM EDT
After several announcements of plans to cut over close to 5,000 jobs within the first five months of this year, computer manufacturer Dell Inc., is once again planning for cuts. This time cost-cutting is planned to occure in various departments within the company.
Dell plans on cutting its costs by over $2 billion within the next three years. It is doing so in attempts to become a more profitable technology supplier.
On Wednesday Dell detailed its plans to save, following its commitment to pay the first quarterly dividend of 8 cents per share in its 28 years. Dell's payoff will cost the company over $560 million annually.
The computer company anticipates most of its saving to come from its sales group. Hopes are that Dell can cut out close to $800 million in spending in that department. Additionally, $600 million in cut-costs are intended to come from Dell's factories and other units in its supply chain. All other cost reductions will be within the service delivery department, approximately $4 million, and an estimated $200 million in Dell's general and administrative spending department.
In addition to its department cuts, the company intends on cutting down on the amount of products they create. However, the company did not detail which products will be cut.
Dell also did not address whether it planned on laying off workers again.
As Dell cuts is costs, the company plans on increasing its investment. Investors believe that this is a good decision on Dell's part. The company's shares rose 2.6 percent on Wednesday.
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