
Report: Dell layoffs this week – 15,000 to be hit - uladzislau
http://www.zdnet.com/dell-layoffs-this-week-15000-to-be-hit-report-7000025879/?
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chimeracoder
This is not surprising. Michael Dell spent billions to take the company
private because he believed the company was undervalued and under-
performing[0], and that he knew how to save it, not because he was content
with leaving it the way it was.

That process necessarily involves personnel changes - if anything, I'm
surprised we didn't see these sooner.

The real question will be _who_ they're cutting (and more importantly, who
they'll be replaced with, or if those positions will be replaced at all).

[0] The other reason public companies go private is to liquidate, but that's
clearly not his goal.

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mcphilip
It'll be interesting to see how development is affected. Dell has had a
reputation of being the place to work if you wanted a high salary with minimal
responsibilities here in Austin. I've heard the politics are brutal, though.

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cesarbs
That sounds so different from their office in Porto Alegre, Brazil. It's a
sweatshop there. I know a number of people who work/have worked there and they
all say it's awful.

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mmanfrin
They have 108.8k employees [1], so this represents 13.8% of the company.

[1] [http://en.wikipedia.org/wiki/Dell](http://en.wikipedia.org/wiki/Dell)

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3pt14159
Interesting. That's roughly a computer a day per year per employee. Assuming
$40k / year per employee, that's $111 bucks per computer of employee cost.
Hirer than I thought.

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jonknee
They sell more than computers though. Monitors, printers, servers, storage,
support, etc etc.

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rayiner
I feel bad for anyone who didn't see the writing on the wall when Dell was
initially acquired. Large-scale layoffs are a key tool for private equity
firms when they take a company private. Indeed, if Dell didn't have a lot of
fat to trim, it would have been a much less attractive takeover target in the
first place.

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hlieberman
How are they not triggering the WARN act? 15,000 is a lot more than the 100
that it requires.

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WestCoastJustin
_The Worker Adjustment and Retraining Notification Act (WARN) protects
workers, their families, and communities by requiring most employers with 100
or more employees to provide notification 60 calendar days in advance of plant
closings and mass layoffs._ [1]

I assume Dell is dealing with the _WARN act_ 's 60 days notification by
including 60 days paid leave in the severance package. The article says that "
_the severance package includes two months ' pay plus an extra week for each
year in Dell's employ, a bonus at 75 percent, health insurance for 18 months
in the U.S. and some outplacement services at least stateside._"

[1] [http://www.dol.gov/compliance/laws/comp-
warn.htm](http://www.dol.gov/compliance/laws/comp-warn.htm)

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toomuchtodo
That's a crazy amount of COBRA/health insurance severance. Not saying its a
bad thing, you just don't see it that often.

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jlgaddis
As an ex-employee, you're entitled to the 18 months by law. The difference
here is that Dell is apparently paying for it, not the employee (although
maybe that's what you were referring to as the "crazy" part).

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toomuchtodo
> although maybe that's what you were referring to as the "crazy" part

Yes. To be frank, in my mind, that offsets a lot of ill will toward the
layoffs. Sure, you're getting let go. But you'll have almost 2 years of health
insurance paid for, and unemployment for at least a year (plus severance).

Not that bad of a deal.

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adanto6840
Yeah, that's a whole lot of _cash_ to be paying out, especially times 15,000!
Even over two years, its a LOT.

Has to be at least $100 million I'd think, possibly even just in the insurance
cost alone, not to mention the direct severance compensation too.

Very respectful & respectable package IMO, probably why the news was released
on a Monday, eh? ;-)

~~~
toomuchtodo
Luckily for Dell, the health insurance is going to be a straight business
deduction.

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programminggeek
When operating at thin margins, if those margins disappear the only way to
stay afloat is to cut costs. The "easiest" way to cut costs quickly is to
reduce your labor force. It is much harder to cut operational costs like
buildings and infrastructure without incurring extra cost or taking a big
loss.

This is one reason why operating a high margin, low cost business is probably
better for both the owners and the employees.

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fidotron
It's curious that the PC model of selling the customers relatively modular
systems is rapidly falling by the wayside in favour of highly integrated
systems, which at their logical extremes are completely unmodifiable. We've
crossed the point at which system integration outside of the SoC is going to
get less valuable very fast.

PCs are clearly headed this way too, but it means economies of scale for
particular configurations are going to be much harder to come by.

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busterarm
So that's why nobody at Dell responded to my application (already working
somewhere else, don't worry).

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mrbill
Wonder how hard this is going to hit the Austin/Round Rock area this time
(again).

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yungether
Dude, you're getting a pink slip!

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da02
Your comment also reveals how the only Dell-related ad people can remember is
10+ years old.

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astrodust
The company hasn't changed in ten years. Their notebooks today look virtually
the same as those from ten years ago. Maybe a little thinner, plus they come
in different colors, but that's about it.

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jotm
You can say the same about Apple. Dell still the best workstations, though,
unlike HP with their stupid redesigns.

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astrodust
Apple's Mac Pro looks nothing like any computer ever made before, and their
new MacBook Retina machines are radically different from their 2004 Aluminum
Powerbook models.

I kind of like HP's redesigns, it shows they're trying. The Envy isn't bad for
a MacBook inspired knock-off.

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jjoe
We'll see many more layoffs like this in the coming weeks / months as the Fed
tapers off. This is macro related.

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winslow
Can you possibly explain a little more? From my research [1] the fed tapering
off looks good for business as stocks skyrocketed according to the article
[1]. Personally I think it is good the Fed is tapering off and starting a slow
transition (note: I have libertarian views hence less gov't involvement the
better). Obviously, I am no expert, maybe someone can explain why it's bad
other than the market might not being ready?

[1] - [http://www.cnbc.com/id/101282912](http://www.cnbc.com/id/101282912)

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jjoe
Fed tapering means there's less liquidity in the markets. That's because
they're buying up less risky assets off the financial institutions. Less money
in the market means less "free" cash available to be loaned up for risky
investments. I wrote a little about this in this submission:
[https://news.ycombinator.com/item?id=7172139](https://news.ycombinator.com/item?id=7172139)

Of course I can't predict what will happen but it's very clear that less money
always means less money. A lot of businesses rely on bank loans to make ends
meet with regards to payroll. This might not apply to Dell but it applies to a
lot of small business owners who need the extra help until they get paid by
their clients and then pay off the short term loan. Stricter payroll loan
policies (when money is scarce = bank reaching low levels of liquidity) puts
businesses in tough situations leading to sudden layoffs.

The Fed's goal is to try and regain control of the system (they lost control
last summer). So by tapering they're shaking the tree. Just like you'd put an
electrical signal through a black box and study the output in an attempt to
understand how it works, the Fed is gradually cutting its $85bn per month
supply of "cash."

That's what the Fed (Yellen) is doing right now. I'm sure they'll react if
things degenerate too much.

FYI, it's a carnage in the financial markets right now. Dow was down several
hundred points in Jan. Several hundred points just today.

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jonknee
... Except the Fed is mainly buying Treasury debt. It actually encouraged
loaning out for "risky" investment by pushing down interest rates. That's why
there's the fear in emerging markets as the program winds up.

