Dell staff told thanks but no bonus

Dell is axing bonus and reducing management in an effort to cut costs, CEO Michael Dell told staff in an internal memo last week.

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By  Peter Branton Published  February 5, 2007

Dell is axing bonus and reducing management in an effort to cut costs, CEO Michael Dell told staff in an internal memo last week. Dell last week resumed the CEO position at the firm he founded, with Kevin Rollins resigning. In an internal memo obtained by the Austin American Statesman, later confirmed by the company as genuine, Dell said that he plans to hold the CEO role for several years. “We have great people… but we also have a new enemy: bureaucracy, which costs us money and slows us down,” he told employees in the memo. While Dell said “thanks!” to his staff for their hard work and sacrifices over the past year, he said that “We had great efforts, but not great results. This is disappointing and it is unacceptable.” As a result, the company is not issuing bonuses this year, Dell said, to be replaced by “limited discretionary awards” that will be available to all but the most senior management. Numbers of that latter group look set to be trimmed, with the current 20-plus senior managers that report directly to the CEO being cut to 12, Dell said. The firm is further ringing the changes to help revive its business, with Paul Bell being recalled to take charge of its ailing Americas business. Bell has headed the EMEA operations for seven years, and sales there have continued to increase. In contrast, Dell’s Americas business – nearly two thirds of its US$60 billion turnover – have declined in volume in recent quarters. Dell was last week hit by a class action lawsuit that warned that it inflated its profits with up to US$1billion worth of payments made by Intel.

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