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Nov 5 2008   8:33PM GMT

Overheard: Dell employees to take mandatory unpaid vacation

Margaret Rouse Margaret Rouse Profile: Margaret Rouse

cubes-tim-the-it-guy.jpg Skimping on five days of payroll may temporarily give the company’s bank account a fillip, but it doesn’t change its permanent cost structure. Then again, maybe Dell’s strategy is to drive away employees who are capable of doing math.

Tim the IT Guy, Dell wants employees to practice being laid off

From Reuters:

Computer maker Dell Inc has asked employees to consider taking up to five days of unpaid vacation as it struggles to cut costs in the face of weak global demand. The No. 2 computer maker, which is near the end of a program of 8,900 job cuts, is also offering voluntary severance packages and has instituted a global hiring freeze. Chief Executive Michael Dell announced the moves in an email to employees on Monday. On Tuesday he said he expects further consolidation in the technology industry, and encouraged companies to ride out financial turbulence by focusing on hard returns, rethinking businesses and investing.

My two cents? It’s not just the economy that’s tightening the noose, it’s the way IT  is changing. Vendors are scrambling to keep themselves relevant, slapping the word “cloud” on marketing copy as it goes out the door. The Reuter’s article says that Michael Dell said he expected 80% of Fortune 1000 companies to be using cloud services within the next few years.  Combine the cloud paradigm with virtualization and that has to be scary.

See also: stealth layoffs at Yahoo

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