The computer maker, Dell Inc. announced on Wednesday plans to make over $2 billion in cost cuts over the next three years from its consumer product lines. Dell is making the move to refocus their efforts on technology needs for corporations, such as software.
The company believes a refocusing on the private sector is a more lucrative move for the #2 PC maker. Dell presented an outline of how they plan on making the cuts and $800 million will be cut from the company’s sales group with an additional $600 million being cut from its factories and other parts of its supply chain translating to them making less consumer products.
“Software and services are a key growth area,” Dell executives told analysts at a conference in Austin, Texas. “The corporate software and services business is on track for average annual growth of 10 percent until fiscal 2016.”
Dell currently employs about 109,000 workers and didn’t mention if the new cut backs would mean layoffs. Rival Hewlett Packard recently announced a similar cost cutting plan, to trim $3 to $3.5 billion from its budget by 2014. A move that will see 27,000 employees get laid off after saying that 8% of the companies workforce would be trimmed.
After Dell made their announcement it apparently made investors happy as shares rose 2.6% to $12.28.