Growing PC demand delays Dell's plan to shut down plant
- — 16 December, 2009 08:31
Dell has delayed the closing of a plant in Winston-Salem, North Carolina, by three months because PC demand is rising, the company said on Tuesday.
The company originally planned to shut down the plant by the end of January, but it needs the installation's extra capability to supplement other factories to meet the increased demand for computers, said David Frink, a Dell spokesman. The Winston-Salem plant mostly focuses on making desktops.
Dell last month reported an increase in sales for the third quarter compared to the prior quarter, though profits declined by 54 percent decline compared last year's third quarter.
The company's net income for the third quarter was US$337 million, down from $727 million in last year's third quarter.
The plant will now shut down by the end of April, Frink said. Dell opened the plant in 2005, and the company announced its closing in October in an effort to cut costs. At the time of the announcement the plant employed around 900 employees. The plant currently employs 400 people.
The plant's pending closure comes as Dell tries to improve operational efficiency. The company has already shut down plants in an effort to reduce costs by $4 billion by the end of fiscal 2011.
The extension of the plant's operations won't affect the cost savings plan, Frink said.
The company has a plant in Austin, Texas, that focuses on servers and plants in countries including Brazil, China, Malaysia, India and Poland. Dell is also outsourcing its manufacturing operations to third parties.