A week after retaking the CEO reins at Dell , founder Michael Dell is saying changes are on the way.
In a memo to employees, Dell said “discretionary awards” would replace bonuses for all but senior managers, whose ranks will be cut nearly in half.
Expecting “a tough couple of quarters ahead,” Dell told
employees he plans to be CEO for “the next several years.” Dell was not immediately available for comment, but confirmed to the Associated Press the memo’s authenticity.
Pointing to “great efforts, but not great results,” Dell’s new CEO said
bureaucracy is the company’s new enemy. The ranks of top managers will
be slashed from 20 to 12, Dell wrote. The first casualty of the new
policy: the COO post won’t be filled. Kevin Rollins,
who Dell replaced, held that spot.
Dell decried the company’s current situation, including poor financial
results, shareholder lawsuits and government investigations. “This is disappointing and it is unacceptable,” Dell told employees.
Noting the company didn’t get into its mess overnight, “we won’t fix
things overnight either,” Dell wrote. He added that the company has changed since he started over two
decades ago. “When I started in 1984, it was just me.
“We’ll have to make some tough decisions, but we won’t be shy about those,”
Dell continued. The company will focus on the customer experience,
leverage its supply chain and build other profitable areas, including
the company’s intellectual property.
The computer maker will also shorten the period for stock-vesting from
five to three years, resulting in less time employees can exercise stock
options. Annual bonuses will be planned “against realistic targets,”
according to the memo.
Dell also outlined changes in the company, including creating several new
divisions.
An Americas organization will focus on small and medium businesses, and
public, commercial and Americas International operations. A Global
Operations division will oversee worldwide manufacturing and
procurement. A Consumer group will also be created to handle online and
brand areas.
Dell plans greater focus on consumer and small business areas, “ensuring
quality, stability and predictability” for larger customers.
Tighter design cycles await Dell’s Product Group. Speedier design will
set Dell apart in customers’ eyes, Dell wrote.
“We’ll fix this business,” Dell said in the memo, first published by the Austin American-Statesman.
