Dell offers VSS to 5,000 M’sian staff

Written by Regina William

GEORGE TOWN: Dell Malaysia is offering a voluntary separation scheme (VSS) across the board to all 5,000-odd employees in Malaysia in line with efforts to reduce its global workforce by 10% or 8,800 jobs.

Late last month, Dell Inc announced a 48% decline in net income to US$351 million (RM1.3 billion) for the fourth quarter of its financial year 2009 (4QFY09) from US$679 million a year earlier.

Sources told The Edge Financial Daily that employees had been informed of the decision and had until the end of the month to make their decisions on whether to take up the offer.

When contacted, Dell Malaysia confirmed that under the Malaysian initiative, the VSS had been offered to all the 5,000 Malaysian staff on Penang island, Bukit Tengah in the mainland and Cyberjaya. However, the actual number of staff that Dell Malaysia targeted to let go is not known.

The Penang Manpower Department also confirmed that it had been informed by Dell of the VSS.

A Dell Malaysia spokesperson said the move was part of its efforts to reduce its global workforce. “This is part of Dell’s ongoing initiative to remain competitive by enhancing our efficiency and underlying cost structure. This action is a prudent and deliberate part of Dell’s ongoing focus on competitiveness.

“We recognise the impact that this action will have on employees, and are working to minimise consequences. Affected employees will be offered competitive severance packages, including career counselling and outplacement services. All actions will be consistent with applicable local laws and practices.”

Dell will, however, continue to hire people with specifically required skills and invest in areas that provide value to customers and enhance its capabilities, the spokesperson said.

“We are continuously reviewing our business model and taking actions that enhance our efficiency and underlying cost structure. We will adjust accordingly and prudently to remain competitive during and after the current challenging economic environment,” the spokesperson added.

During a conference call with Asia- Pacific journalists at the end of last month, Steve Felice, president of Dell’s small and medium business, said that the job cuts in Asia would be “minor” in the overall scheme of Dell’s global operations.

With a 16% decline in revenue for its fourth quarter ended Jan 30, rumours had been rife that Dell would close its facility in Penang or sell its operations to contract manufacturers. Dell is also said to have outsourced 70% to 80% of its operations in Penang.

Felice had said then that there would be no plant closures besides the two which were being closed in Ireland, shedding 1,900 jobs from April and another 800 to 900 jobs in Austin in the US.

However, on March 11, it was reported that an assembly plant in North Carolina would be next on Dell’s cost cutting moves resulting in more layoffs.

Meanwhile, apart from the planned layoffs, it’s business as usual for Dell.

In a statement yesterday, Dell introduced the new Adamo (derived from the Latin word meaning to fall in love) brand, with the launch of the world’s thinnest laptop, priced from RM7,399. It is available for pre-order at www.adamobydell.com with shipping to start March 26.