Dell is using an interesting strategy to trim expenses. It’s asking its employees to quit, a Dell spokesperson confirmed.
Dell is calling this a “voluntary separation program,” the spokesperson told us, so it can’t be called a layoff, even though it has a lot of layoff-like elements: employees have to be deemed “eligible,” they have to leave their jobs, and they get a chunk of money and other services to help them until they find a new job.
But because a person has to quit, we’ve dubbed the strategy an “anti-layoff.”
Companies have done similar things for eons for long-term employees soon eligible for retirement benefits, but in this case Dell confirmed that it was not an early retirement program and was open to global employees.
Dell must be feeling pressure to trim expenses and free up cash. In October, founder Michael Dell completed a $US24.9 billion buyout of Dell along with investment firm Silver Lake Partners and took the company private. As part of the go-private deal, Dell borrowed $US5.5 billion, plus it took on another $2 billion loan from Microsoft.
We have to say, an anti-layoff seems more humane than a typical workforce reduction, where employees have no say in the matter.
We would love to hear from people inside Dell about how well it’s working. (Drop us a line at [email protected]).
Here’s the full statement that Dell sent us.
Dell has announced an optional, global and voluntary separation program for eligible team members who choose to leave the company in exchange for the offer of a separation package to support their transition. Would note that we’ve taken steps to optimise our business, streamline operations and improve efficiency over the past few years. And we been consistent in saying that a critical element of our strategy has been, and always will be, about improving our cost structure and freeing up capital to make the investments in growth areas that matter to our customers.
Like any prudent company, we’ll continue to evaluate and implement opportunities to enhance our operational effectiveness on an ongoing basis.
We won’t have additional comment about the program, the number of Dell team members taking advantage of it or the cost involved.
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