Heads roll at beleaguered Dell

“Dell Inc. on Wednesday said president of global operations Mike Cannon will retire and Chief Marketing Officer Mark Jarvis will leave the company, shaking up the executive team Chief Executive Michael Dell brought in as part of his turnaround plan for the big computer maker,” Justin Scheck, Suzanne Vranica, and Joann S. Lublin report for The Wall Street Journal.

“Dell also said Wednesday it will organize globally around three main segments — large enterprise, public sector and small and medium businesses, to serve business customers better. It said its consumer business, led by Ron Garriques, is already organized globally,” Scheck, Vranica, and Lublin report.

MacDailyNews Take: Yes, organized neatly in the crapper. Courtesy flush, please!

Scheck, Vranica, and Lublin continue, “Cannon and Jarvis joined Dell in 2007 and reported directly to Mr. Dell. Earlier that year, Mr. Dell returned to the CEO role after a three-year hiatus during which time the company lost its place as the world’s biggest personal-computer maker and missed Wall Street profit projections. Upon returning, Mr. Dell promised to cut costs and expand into areas like high-end consumer PCs, retail sales and business services to spark new growth.”

MacDailyNews Take: Mikey thinks he’s gonna make it up in volume.

Scheck, Vranica, and Lublin continue, “Mr. Cannon received $16 million in salary, stock and other compensation in fiscal 2008, which ended last January, according to Dell’s proxy statement. Mr. Jarvis received $6.8 million in total compensation, the company disclosed, including reimbursement for a chartered plane to shuttle him between his Northern California home and Dell’s Texas headquarters.”

“Dell shares, which were trading above $20 when Mr. Dell returned as CEO, finished Tuesday at $10.23 at 4 p.m. on the Nasdaq Stock Market,” Scheck, Vranica, and Lublin report. “The company’s new consumer division hasn’t generated consistent profits, and growth in Dell’s world-wide commercial sales — which account for more than 80% of the company’s annual revenue — were down 6% in the quarter that ended in October. Total quarterly revenue declined 3%, while profit fell 5%.”

More in the full article here.

MacDailyNews Take: SIDAGTMBTTS.


  1. I can’t for the life of me imagine how Mr. Cannon manages to squeak by with only $16 million per year. Poor guy.

    Executive over-compensation means less profits for shareholders, and less money for R&D;. It also widens the gap between rich and poor, making the US into another third-world country–the very thing that Eisenhower warned us about.

    During an economic downturn, people talk about how companies need to streamline their operations by laying people off, and then the same people cite the unemployment rate as evidence of the downturn. Huh?

  2. Dell can’t compete in the high end computer business. Apple rules that marketplace. Dell also can’t make any money on the low end.
    Best bet is to stay in that mid-priced area. Cut costs, add value.

  3. Dell is definitely circling the bowl. It’s just a matter of time.

    Peace and Happy New Year to all!
    Olmecmystic ” width=”19″ height=”19″ alt=”cool smile” style=”border:0;” />

  4. I for one hope Dell does better in 2009. I don’t like seeing companies fail and people lose their jobs. Sure, Michael Dell has said some really dumb things about Apple, but I like to see success. I take no joy in the failure of any organization.

  5. This is unfortunately what happens when companies stop innovating. Dell did innovate in the area of supply chain and “just in time” manufacturing, but once that area was refined, nothing new was developed and everyone caught up.

    What is sad is that if Mikey and other major PC makers had stood up to Balmer and demanded a better OS or even started their own subsidiary to buy or make a really good Linux distro that shipped as the standard OS, they might be in better shape.

  6. Dell selling high-end computers. Ha! It is to laugh.

    Look, “Dell” as a brand name is right up there with “Wal-Mart” and “McDonalds”, places you go to buy something quick and cheap, but not where you go if you want something exceptionally good. When people think of Dell they think of $499 near-disposable crap boxes. Dell is not going to turn that around and make their brand hip. That ship sailed a long time ago.


  7. “Mr. Dell promised to … expand into areas like high-end consumer PCs …”

    Aren’t those already made by, um, … Apple?

    And unless DELL is backing the Psystar flimflam and is successful in that venture, I don’t give DELL much hope of competing against Apple at Apple’s own game.

    But as long as DELL’s executives are pulling 16-million-dollar-plus salaries, why would they change their marketing strategy?

  8. @Alansky and Thelonius Mac
    Actually Dell made a lot of money on Corporate and Government accounts. The only real consumers that bought their stuff are the people that wee forced to use their crap at work. There were also a lot of State educational systems that got sucked into lower priced inferior quality Dell stuff (NYC BOE for one). Back in 2006 I saw a few schools outfitted with DELL server rooms along side 3 and 4 year old mac books IMacs and you saw some cheap DELL purple boxes with old CRT monitors.

    At this point Michael Dell or someone in the organization needs to step up and show that the company was not just a one trick pony. I fear that would mean entering niche markets where their claim to fame (wring out the supply chain ) may not yield a competitive advantage unless they rethink out the whole process. The only other way is to create a paradigm shift which is not in DELL’s DNA. Prediction Michael sells out to Lenovo or Acer in 2 years which will cause the loss of a ton of government contracts

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