Dell's facilities in Canada are being hit by the company's efforts to save US$3 billion over the next three years, with customer service centers in the country being phased out.
Dell announced Wednesday that it was shutting down its last major customer service center in Ottawa as part of a companywide effort to improve productivity and reduce costs. The closure will affect approximately 1,100 employees, said Blair Patacairk, a Dell spokesman. About 500 have already been let go, and 600 more will be laid off or offered alternate jobs within Dell by June or July, he said.
The facility, which handled customer support mainly for high-end XPS systems, is the second customer facility that Dell has shut down in Canada. In January it said it would shut down a service center in Edmonton, Alberta. That facility, which employed about 900 people, is still in the process of being phased out, Patacairk said.
The work done by both centers will now be handled by Dell's 25 other customer service centers worldwide, Patacairk said.
Dell will retain approximately 1,000 personnel, mostly in operations, in Canada, he said. It will also retain a small customer service team to serve French speakers in the province of Quebec.
"This is going to make us cost-competitive overall. The global market we are in, it's very competitive. If you are not cost-competitive, you are behind," Patacairk said.
The layoffs are part of a cost-cutting effort announced last year. During a conference for investors earlier this month, CEO Michael Dell reaffirmed plans to reduce headcount by at least 8,800, with further job cuts possible.
The company has already taken steps to realign its North America operations. Last month, Dell said it would cut 900 jobs after shutting down a customer service center in Austin, Texas. Operations of that site were shifted to other "underutilized" sites in North America, a Dell official said.
Other cost-cutting steps include reducing compensation, restructuring its product design and distribution, and shutting down some factories, while opening new operations in emerging markets.
Dell has also opened factories in Poland, Brazil and India to meet the growing needs in emerging markets. The company is willing to shift computer assembly to partners to reduce costs and boost margins, Dell officials have said in the past.
It is also cutting expenses by designing products for specific audiences and price points, rather than offering a generic base on which to build PCs for all segments. To boost its revenue, Dell has diversified from its traditional direct sales model to retail sales by signing up more than 10,000 retailers worldwide to sell its PCs.
Dell is also looking to sell its financial services unit, Dell Financial Services, which has attracted some bidders.
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