Michael Dell, the billionaire founder of Dell, has written an internal memo to his employees reiterating the fact that the company will continue to make investments in its employees and partners going forward.
Dell, who founded the company with $1000 in 1984 at the age of 19, is in the midst of taking the company private is locked in takeover battle led by a private equity investors (Blackstone and Silver Lake Partners).
With regard to this, employees and business partners have been unsure about the PC major’s plans once this buyout fructifies.
Addressing all the stakeholders about these issues, Dell in his letter said that the company anticipates making significant investments in research and development, capital expenditures and personnel additions.
“This includes hiring additional R&D, services and sales personnel in order to extend the depth and breadth of our capabilities and increase the number of customers to whom such services and solutions are provided,” the note said.
The PC maker which has been struggling since the past few years due to a combination of debt accrued as a result of a string of acquisitions (12 since 2010) and an economic slowdown has reduced the appetite of consumers and businesses who bought Dell’s products. The company has been struggling to get users buy into its traditional products such as desktops and laptops as users are buying more smartphones and tablet computers.
Last year, the company shelved its smartphone business but in the note Dell pointed out that it plans to significantly increase investment in its PC and tablet business to enhance its competitiveness. Further, chalking out its strategy, the company intends to be an integrated provider of IT solutions (includes hardware and software) and in line with that additional investments in converged infrastructure solutions, software, cloud solutions, application development and modernisation, consulting and managed security services will be made.
BRIC INVESTMENT
The company plans to increase investments in Brazil, Russia, India and China (BRIC) and expand ‘aggressively’ in other geographies simultaneously.
The note allayed fears of job cuts across its global centres and said that the company will increase hiring in R&D, distributors and sales personnel. Some competitors question whether this additional investment would play off.
“With significant debt, it would be interesting to see how the company will continue to invest,” said an analyst with a multinational firm.