Dell's facilities in Canada are being hit by the company's efforts to save
US$3 billion over the next three years, with customer service centers in the
country being phased out.
Dell announced Wednesday
that it was shutting down its last major customer service center in Ottawa as
part of a companywide effort to improve productivity and reduce costs. The closure
will affect approximately 1,100 employees, said Blair Patacairk, a Dell spokesman.
About 500 have already been let go, and 600 more will be laid off or offered
alternate jobs within Dell by June or July, he said.
The facility, which handled customer support mainly for high-end XPS systems,
is the second customer facility that Dell has shut down in Canada. In January
it said it would shut down a service center in Edmonton, Alberta. That facility,
which employed about 900 people, is still in the process of being phased out,
Patacairk said.
The work done by both centers will now be handled by Dell's 25 other customer
service centers worldwide, Patacairk said.
Dell will retain approximately 1,000 personnel, mostly in operations, in Canada,
he said. It will also retain a small customer service team to serve French speakers
in the province of Quebec.
"This is going to make us cost-competitive overall. The global market
we are in, it's very competitive. If you are not cost-competitive, you are behind,"
Patacairk said.
The layoffs are part of a cost-cutting effort announced last year. During a
conference for investors earlier this month, CEO Michael Dell reaffirmed plans
to reduce headcount by at least 8,800, with further job cuts possible.
The company has already taken steps to realign its North America operations.
Last month, Dell said it would cut 900 jobs after shutting down a customer service
center in Austin, Texas. Operations of that site were shifted to other "underutilized"
sites in North America, a Dell official said.
Other cost-cutting steps include reducing compensation, restructuring its product
design and distribution, and shutting down some factories, while opening new
operations in emerging markets.
Dell has also opened factories in Poland, Brazil and India to meet the growing
needs in emerging markets. The company is willing to shift computer assembly
to partners to reduce costs and boost margins, Dell officials have said in the
past.
It is also cutting expenses by designing products for specific audiences and
price points, rather than offering a generic base on which to build PCs for
all segments. To boost its revenue, Dell has diversified from its traditional
direct sales model to retail sales by signing up more than 10,000 retailers
worldwide to sell its PCs.
Dell is also looking to sell its financial services unit, Dell Financial Services,
which has attracted some bidders.
