Dell pushing unpaid leave as a way to cut costs

Chris Davies - Nov 5, 2008, 5:54 am CDT
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Dell employees are being encouraged to take an extra five days unpaid leave, in a move to reduce outlay and minimize the chance of further redundancies.  The request was made in a memo from CEO Michael Dell, in which he highlighted the recent 10-percent cut in employees (as promised back in September) and suggested that, if this new plan does not succeed, more cuts will be coming.

Dell has also frozen new hires, eliminated contract employees and has begun offering severance packages to staff willing to leave voluntarily.  The company has not disclosed its target savings; however the recent 17-percent drop in earnings means there is likely plenty of ground to recover.

It’s unclear how Dell employees have reacted to the request.  The shortfall in profits has been blamed on “further softening in global end-user demand” and “continued conservatism” in the US, Europe and parts of Asia.


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