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The Slimfast Plan

Why has service declined so drastically? The PC industry is suffering through an ugly year. Sales are slumping, companies are fighting a price war, and profits are shrinking. Clearly, the environment doesn't encourage companies to go the extra mile to improve customer service. "Hardware vendors are under the gun to cut costs wherever they can," says Ana Volpi, program manager of research firm IDC's technical support services group.

Because layoffs reduce costs, almost every major PC maker has laid off employees this year. For example, Dell cut about 5000 jobs earlier this year; and following the proposed HP-Compaq merger, the new HP says that it plans to lay off roughly 15,000 people. We asked a number of PC makers whether tech support staffers would be laid off.

Dell told us that its cutbacks would not affect its support operations. "We purposely did not make cuts among the front-line service representatives, the people who handle our customers directly," says Rick Chase, Dell's vice president of customer service in the home and small-business group.

As part of Gateway's plan to cut 2100 jobs in the United States, the company will consolidate several call centers around the country. "It's possible that there will be job losses among technical support operators in certain regions," says Gateway spokesperson Tyson Heyn. "But we are hiring technicians in other areas, such as Kansas City, Missouri, and Sioux Falls, South Dakota." Heyn adds that Gateway plans to ramp up service options on the ground through its local Country Stores, beefing up phone support and keeping more spare parts on hand.

HP spokesperson Ann Finnie says that at this writing the company has not ironed out any details about its post-merger support operations. HP couldn't say whether the HP and Compaq brands would remain separate, nor could it specify how the job cuts would affect its service departments.

Even confronted with the grim reality of layoffs, such companies as Compaq and IBM deny that service is suffering. "Despite the economic climate, we continue to invest in customer service," says Compaq's Young. Compaq regularly surveys its customers about support every week, and Young says those surveys indicate that significant improvements in service have occurred this year compared with last year. Young adds that Compaq has shortened its customers' hold times to roughly a minute on average, and increased the likelihood that problems will be fixed during the first technical support call.

Our survey results show a different picture, though. Only 42 percent of respondents who own Compaq home PCs had their calls picked up in 5 minutes or less--a sharp drop from the previous survey's figure, 64 percent. When we asked readers whether problems were resolved in five days or less, 56 percent of Compaq customers said yes, down from almost 64 percent previously. Nearly 14 percent of Compaq home PC owners said they were left with an unresolved problem, compared with slightly over 9 percent in last January's survey.