Dell Blames ‘Soft’ Computer Sales for Share Slump
Computer manufacturer Dell’s shares fell by 8.3 percent in early Wall Street trading today. The drop came after the firm warned investors that it would see a “further softening” in computer sales this quarter.
In a short statement released by the company, it said it was “seeing further global softening in the global end-user demand in the current quarter.”
Dell also admitted that it will be hit with heavy costs associated with the realigning of its business – one that continues to operate in the shadow of Hewlett-Packard.
Over the past year the company has undergone a testing re-structuring exercise, and has plans to make 9,000 employees worldwide redundant.
The Company’s owner Michael Dell recently tried to reassure investors by vowing to save $3bn in annual costs by cutting back on staff and shifting to lower cost producers.
In August Dell posted a surprise 17 per cent drop in profits for its second quarter. At the time Dell said that the loss of earnings was a result of technology spending slowdowns and its expansion into Europe and Asia.
Although the company admitted that demand for its products would diminish this quarter, the company still expects growth to be better than its rivals for the full year. Dell’s directors will address its investors about its losses in more detail later today at the Bank of America 38th Annual Conference in San Francisco.
This is more bad news for the industry after HP’s announcement that 25,000 of its employees would lose their jobs as part of Mark Hurd’s “restructuring program” following his company’s takeover of EDS last month.
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