Monday, 7 May, 2001, 21:05 GMT 22:05 UK

Dell to lay off 10% of staff

The US economic slowdown has weakened demand for PCs In a fresh indication of the troubles facing the US economy, Dell Computer, the world's number one personal computer maker, has said it will cut up to 4,000 jobs, or 10% of its workforce, this year.

The news came as the company said it expected to meet projections for first-quarter profit of 17 cents a share and revenue of $8bn.

But over the next two quarters the Round Rock, Texas-based company intends to layoff as much as 10% of its workforce - 3,000-4,000 workers.

The company said most of the job cuts would come in Texas. In part, they would be achieved through attrition.

These latest cuts come in addition to the 1,700 job losses Dell announced in February.

'Streamlining'

Dell's cuts come in the face of much weaker demand in the US for personal computers and technology services.

Like many other companies, Dell has reacted by cutting costs.

It has also made an aggressive move for greater market share, reducing the prices of its products. .

"Slowing industry growth is both requiring Dell to resize its workforce and allowing the company to streamline its organisation after several years of rapid expansion," the company said in a statement.

Gerard Klauer Mattison & Co analyst David Bailey said: "Their reiteration of their revenue and earnings guidance is positive, but the fact they are cutting additional jobs seems to signify that they are expecting demand to remain weak and for the price war to continue."

The news came after trading ended on the New York markets.

Dell shares, which are listed on the technology-dominated Nasdaq market, gained slightly in Monday trading to end the day at $25.91.

Dell is due to report first-quarter results on 17 May.

In the first quarter of 2000, Dell made $525m - or 19 cents a share - profit on sales of $7.28bn.

-- Anonymous, May 07, 2001