Losses in the global tech sector continued to mount today as computer maker Dell reported taking a hefty charge following workforce reductions while Sony saw a 25 per cent drop in sales and game maker Nintendo revised its profit forecast downwards.
Dell will take a pre-tax charge of US$135 million related to workforce reductions in Europe and efforts to streamline its manufacturing operations there. It will also incur a separate pre-tax charge of $145 million related to stock-based compensation, the company said. Cutback in Canada began early last year with the closure of Dells Ottawa and Edmonton facilities.
The expenses, totaling $280 million, will mean a charge of about $0.11 per share against fourth-quarter earnings, the company said.
The workforce reductions in Europe were announced earlier this month, when Dell said it would lay off about 1,900 workers at a factory in Limerick, Ireland, and move those manufacturing operations to Lodz, Poland.
The changes are all part of a cost-cutting effort announced last March that aims to save Dell about $3 billion by the end of 2011. That effort also included about 8,800 layoffs that were largely completed at the end of Dell’s third quarter last year.
The company said it will take additional cost-cutting steps in 2010.
Dell is due to report its earnings Feb. 26. Sony’s sales during the last three months of 2008 dropped by 25 percent due to the slowing world economy and strengthening Japanese yen, but the company still managed to keep its head above water thanks to an exceptional gain from foreign exchange.
The company slashed 8,000 positions and shuttered several factories in December last year.
The company recorded a fiscal third-quarter net profit of