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Dell announces closure of its Austin, Texas plant


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Drastic cost cutting measures

In a surprise announcement, Dell Inc. announced on Monday that it will close its desktop manufacturing plant in Austin, Texas, as well as cut costs in the areas of design, manufacturing, materials, manufacturing and operating expenses.

Dell said that its Austin, Texas desktop computer plant with 900 workers would close, as part of a broader plan to cut expenses by $3 billion annually within the next three years. Dell Inc. also reaffirmed its plan announced last year to cut at least 8,800 jobs, or approximately 10 percent of its work force.

Dell has already eliminated 3,200 of the targeted jobs in the last nine months of its fiscal 2008. According to a Dell spokesman, the Austin plant jobs will be eliminated in phases, while production will continue through Dell's fiscal fourth quarter.

This announcement comes after Dell bought out the final stake of its financing business from CIT Group, Inc. CIT Group is facing huge losses due to the credit market crunch/financial crash and faces the possibility of going under as a company. 

Dell also said it was reviewing "ownership alternatives" for its financing business, which extends credit to consumers and small and medium businesses through credit financing so that they can purchase Dell products.

Last modified on 01 April 2008
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