Dell planning to ditch factories
During the conference call reporting on second quarter financial results, Dell’s new CFO Brian Gladden said several times that the company has “more work to be done,” to improve profitability and decrease costs. He wasn’t kidding. Over the last year Dell has cut headcount by more than 8,000, and now The Wall Street Journal is reporting that the company is planning to radically alter its production line by selling off its factories to contract manufacturers.
Dell has four factories in the U.S. and six outside the country. Competitors such as Hewlett-Packard have shifted some of their assembly work to more efficient contract manufacturers to lower production costs and increase operating margins. The Journal noted that Dell may not have an easy time ridding itself of its factories.
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