Dell to lay off 905 in plant closure

By David Goldman, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Computer maker Dell announced on Wednesday that it will close a plant in Winston-Salem, N.C., and will cut 905 jobs as a result. Dell said that 600 plant workers will be laid off in November, and the remaining 305 employees will be cut by January 2010, when the plant is scheduled to close. The cuts represent about 1% of the company's 76,000 employees. "This is a difficult decision, especially for our North Carolina colleagues, but a necessary one for Dell customers and our company," said Frank Miller, vice president of Dell, in a statement. "The efforts of our team members there have been significant and we're committed to helping them through their transition."

The Winston-Salem plant was used to make desktop computers. The company said the plant closing is part of a larger effort to simplify Dell's operations and improve its efficiency. Dell began cutting back staff and closing plants in January. In late September, Dell bought tech services provider Perot Systems (PER) for $3.9 billion as part of an effort to seek an additional source of revenue. Until the Perot deal, Dell has strictly been a hardware company, selling PCs and servers to its customers. But businesses have relied less on hardware recently, buying fewer computers and outsourcing their servers during the recent economic recession. Consumers also made fewer desktop and laptop purchases during the downturn. That cut into Dell's sales and profit in recent quarters and sent the stock down to an 11-year low in March before rebounding in recent months. Shares of Dell (DELL, Fortune 500) fell more than 1% in afternoon trading.