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Dell plans more than $2 billion in cuts over next three years

Dell outlined its cost-cutting plans the day after announcing the first quarterly dividend in its 28-year history. The quarterly dividend of 8 cents per share will cost Dell more than $560 million a year.
By The Associated Press Published: June 14, 2012
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Computer maker Dell Inc. is planning to trim its expenses by more than $2 billion during the next three years as it tries to move into more lucrative areas of technology.

Dell outlined its cost-cutting plans Wednesday, the day after the company committed to paying the first quarterly dividend in its 28-year history. The quarterly dividend of 8 cents per share will cost Dell more than $560 million a year.

The bulk of the projected savings will come from Dell's sales group, where the company plans to wring out about $800 million in expenses. Another $600 million in cuts are envisioned in Dell's factories and other parts of its supply chain. The remainder of the cost-cutting will be concentrated in service delivery ($400 million) and its general and administrative spending ($200 million).

As part of the belt-tightening, Dell expects to make fewer products. The company's management didn't identify which of its products might be jettisoned.

The company, which is based in Round Rock, Texas, also didn't say whether it will lay off workers or eliminate jobs through attrition to save money. Wednesday's presentation for analysts and investors mentioned “consolidation” of sales support, a winnowing process that often leads to layoffs. Dell currently employs about 109,000 workers.

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