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Businesses News Hardware

Layoffs At Now-Private Dell May Hit Over 15,000 Staffers 287

Posted by timothy
from the layoffs-happen-to-public-firms-too dept.
schwit1 writes "Curious why Michael Dell was so eager to take the company he founded private? So he could do stuff like this without attracting too much attention. According to the Channel Register, the recently LBOed company is 'starting the expected huge layoff program this week, claiming numbers will be north of 15,000.' Of course, with a private sponsor in charge of the recently public company, the only thing that matters now is maximizing cash flows in an environment of falling PC sales, a commoditisation of the server market and a perceived need to better serve enterprises with their ever-increasing mobile and cloud-focused IT requirements — things that do not bode well for Dell's EBITDA — and the result is perhaps the largest axing round in the company's history. But at least the shareholders cashed out while they could."
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Layoffs At Now-Private Dell May Hit Over 15,000 Staffers

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  • Wrong (Score:5, Insightful)

    by u38cg (607297) <calum@callingthetune.co.uk> on Tuesday February 04, 2014 @08:52AM (#46149097) Homepage
    This should have been done by the previous management. Dell is running a company whose business is in serious decline where no-one really knwos where the market will be in five to ten years time. Doing anything else would be commercial suicide.
  • by alexander_686 (957440) on Tuesday February 04, 2014 @08:52AM (#46149099)

    Of course, with a private sponsor in charge of the recently public company, the only thing that matters now is maximizing cash flows ......

    How is it different now that they are private? Don’t public firms try to maximize profits? I know back in the 80’s, LBO tried to generate as much as cash flow because they have mortgage everything and were up to their eyeballs in debt. Dell is nowhere near that.

    No, this is because Mr. Dell wants to take Dell Inc. in a new direction as fast as he can – away from the low profits of a commodity business.

  • by TWiTfan (2887093) on Tuesday February 04, 2014 @08:53AM (#46149103)

    I bet he'll still go to Congress this year and tell them that he needs more visa to import more indentured servants.

  • And? (Score:5, Insightful)

    by Dan East (318230) on Tuesday February 04, 2014 @08:55AM (#46149121) Homepage Journal

    PC sales have been steadily declining for years. Large PC maker lays off employees. And? Same thing happened at record player companies. And typewriter companies. And factories that produced film. If you want to complain about something, the complain about how Dell couldn't turn itself into Apple or Google. Laying off people is the only way to save the company at this point in time.

  • by rjejr (921275) on Tuesday February 04, 2014 @09:02AM (#46149167)
    Usually when big companies make big moves like this their stock price goes up as they are cutting costs. This article makes it osund like it would have been a bad thing to fire people while it was still a publicly traed company. Publicly traded companies fire people all the time, it' snot better or worse or different now that they are private.
  • by Sockatume (732728) on Tuesday February 04, 2014 @09:07AM (#46149207)

    To serve their stakeholders, private companies must maximise net revenue, while publicly traded companies must maximise share price. The means to achieve those two goals are not always the same, because very often the market price is decided by idiots.

  • by Moof123 (1292134) on Tuesday February 04, 2014 @09:11AM (#46149229)

    The head of engineering at a former job told the crowd after a nasty layoff "We are ALL temporary employees" several times over.

    Get used to it. In most jobs your loyalty is purchased in 2 week increments. Check your contract, or rather your lack thereof.

  • by DoofusOfDeath (636671) on Tuesday February 04, 2014 @09:18AM (#46149291)

    I would think that private companies can maximize whatever the hell they want: short-term profit, long-term profit, the number of frogs in Ohio, etc.

  • by jageryager (189071) on Tuesday February 04, 2014 @09:18AM (#46149293)

    This is slanted wrong. Public companies have share holders to answer to. They've sold their soul to the devil, AKA: Share holders who almost always buy shares to make money.

    A private holder, a guy who is already rich, he can do what he wants. Maybe try to make money. Maybe try a long term growth strategy that won't make money for a few years. Maybe keep people on the payroll who should be layed off now, just so they will be ready to go to work in 6 months. I'd be way more critical of what public companies do to make money than I would be critical of private companies.

    There are quite a few examples of privately held companies going the extra mile for their employees at the expense of short term profits.

  • Re:Wrong (Score:5, Insightful)

    by Herkum01 (592704) on Tuesday February 04, 2014 @09:20AM (#46149313)

    If this were done by the previous management, the stock price would have gone up and M. Dell would not have been able to purchase the company. Hence, leaving the company limping along was probably the plan all along.

    Just another way management can screw over the stockholders.

  • by ubersoldat2k7 (1557119) on Tuesday February 04, 2014 @09:30AM (#46149381)

    That's one of the reasons I cannot feel any sort of loyalty to any company I've worked for ever and I laugh at those who do.

    I'm a "soldier of fortune" (yes, I've been called that in pre-job/post-job interviews) but it's all business at the end of the day and your beloved company won't feel any regret of firing my or your ass when the gods of the spreadsheets declare their thirst for blood. Hell, even Steve Jobs was fired from Apple, which the guy founded.

    Also, all that crap about corporate values: I don't give a fuck! The only way I'm staying somewhere is because I'm either better paid or because I have better conditions, if that's not the case, I'm gone. And so do you.

  • by ebno-10db (1459097) on Tuesday February 04, 2014 @09:35AM (#46149425)

    Get used to it.

    Fuck getting used to it. You should deal with the reality of it, but "getting used to it" means thinking of it as something that's reasonable. That's bull. A few decades ago this was not the norm. Large successful companies didn't do it. IBM started a "no layoffs" policy during the Great Depression and IIRC they did okay afterwards. This "we are all temporary employees" has nothing to do with any essential new business requirements, and everything to do with politics and a shift back towards the Gilded Age.

  • by CohibaVancouver (864662) on Tuesday February 04, 2014 @09:58AM (#46149583)

    At least they get health coverage for the next 18 months.

    America is bananas. You lose your job with all the stress that entails, then on top of that you have to worry about whether you have the coverage required if your kid gets sick.

    Hey USA, get with every other first world nation on earth (and a few second and third world ones) and get some universal healthcare for YOUR people.

  • Re:Wrong (Score:4, Insightful)

    by capedgirardeau (531367) on Tuesday February 04, 2014 @10:13AM (#46149769)

    Of course people want to lay off 15% of the workforce. That is very typical in leveraged buyout processes and part of the plan from square one.

    You are take out big loans to buy the company, knowing you are going to immediately gut it maximize profits in the short term so you can pay off the loans. Then you continue to milk what remains as profit, letting the business decline knowing you can sell off chunks to get the last drop of value out of the company, and then at the very end, when you have loaded it up with debt again, you declare it bankrupt and walk away.

  • by ebno-10db (1459097) on Tuesday February 04, 2014 @10:44AM (#46150103)

    I was laid off a couple of years ago from an employer which had a high average age

    A charming aspect of our for-profit health insurance system is that this is a concern for employers, which leads to age discrimination. Even under Obamacare you can have a 3:1 range depending on age. If we're going to have that kind of crap, why not go back to the old system where insurance would cost a fortune if you had existing health problems. How is that any more discriminatory? No other country does it this way. In Germany for example, where insurance is mostly handled by non-profit insurance companies, you can only vary premium costs depending on where you live. Like other countries, the per capita health care expenses are at least a third less than the US (as a %/GDP - the difference is greater if you use exchange rate or PPP).

    Yes, I'm in my 50's. If I have to go back to COBRA or "open market", that will cream me. It's ok to screw me because of my age, but the fact that I'm in good health doesn't buy me anything. Basically I spent decades subsidizing the health care of those who were older or less healthy than me. I'd be fine with that, except now that I'm older it's a big "SCREW YOU".

  • by ebno-10db (1459097) on Tuesday February 04, 2014 @11:05AM (#46150343)

    Health care ended up being tied to employment because everybody worked.

    You're ignorant of history. Health care ended up being tied to employment because there was a wage freeze during WWII, but a loophole let employers add benefits.

    It was our grandparents who made this nation the greatest in the world.

    And it was our grandparents who fought (sometimes literally) for better wages and working conditions, Social Security, and a host of other evil things. If it hadn't been for the employer based health insurance in WWII, we'd likely have gotten UHC in the late 40's. We also would have saved trillions of dollars because of it.

    Universal Healthcare will be part of that after Obamacare fails

    Let's hope we don't become a socialist hellhole like Canada, Australia or Japan.

    Just join the Occupy Wallstreet crowd and stand in line for a government handout.

    If you want a handout you'd be better off on Wall Street. The banks got handouts that are beyond the wildest dreams of anybody in the OWS crowd.

  • by pnutjam (523990) <(gro.zciworob) (ta) (todhsals)> on Tuesday February 04, 2014 @11:51AM (#46150845) Homepage Journal
    There are so many variables when you buy insurance. I'm blessed with good health myself, but I have seen it happen to people.

    I had a friend who had a brain tumor which meant he lost his job (truck driver). So, of course he lost his insurance and you can bet that insurance companies weren't jumping out of the wood work to cover him. Even Cobra is little help in a situation like that.

    It's really stupid for insurance to be tied to employment. Only a single payer system makes sense. I would much rather pay taxes today to insure I am covered when I need it, vs our current system of paying premiums so 2 or 3 middlemen have a job and when you need the insurance you can't have it.
  • by ShanghaiBill (739463) on Tuesday February 04, 2014 @12:07PM (#46150987)

    It's really stupid for insurance to be tied to employment.

    Indeed. During the communist era in China, each factory ran a school for the children of their workers. If someone changed jobs, their children had to change schools. Americans laugh at how insane that was, but the way we run our healthcare system is just as stupid. It is absurd for your employer to be involved in your healthcare.

    Here is a complete, exhaustive list of everything that an employer should provide to their workers in exchange for their labor:

    1. Money

    Everything else (healthcare, pension, etc.) should be obtained elsewhere.

Mediocrity finds safety in standardization. -- Frederick Crane

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