SAN JOSE, Calif. Computer maker Dell Inc. has reorganized management around four global divisions amid declining profits and slowing revenue growth. In the shakeup, two fairly recent additions to Dell's executive ranks are leaving the company.
Dell will create three new global divisions during the first half of the company's 2010 fiscal year which begins in February. Dell already has a global consumer group run by Ron Garriques which continues unchanged.
The new global divisions include a large enterprise unit run by Steve Schuckenbrock, currently president of global services and chief information officer. A government group will be headed by Paul Bell, currently president of Dell Americas; and a small and medium business group will be run by Steve Felice, Singapore-based president of Dell Asia-Pacific and Japan.
"Customer requirements are increasingly being defined by how they use technology rather than where they use it," said Michael Dell, the founder who returned as chief executive of the company in 2007. "That's why we won't let ourselves be limited by geographic boundaries in solving their needs," he said in a press statement.
As part of the reorg, two executives hired by Michael Dell to revitalize the company upon his return in 2007 will leave the company.
Mike Cannon, president of global operations, will retire effective Jan. 31. Canon, former chief executive of Solectron, was hired to help Dell streamline its manufacturing operations. He will be succeeded by Jeff Clarke, who will take on the operations role in addition to his duties as head of Dell's business client product group.
In addition, chief marketing officer Mark Jarvis, a former Oracle executive hired to help reorganize Dell's marketing efforts, will leave the company later in the current quarter. He will be replaced by Erin Nelson, former vice president of marketing for Dell in Europe, the Middle East and Africa.
One blogger said the former Solectron and Oracle execs are taking the fall for the company's lackluster performance.
"Despite layoffs, cost-cutting, the outsourcing and the new marketing strategy, the stock is down from a high of $30 to $10.23 today," said Nicholas Carlson of Silicon Alley Insider. "Somebody has to pay for that and clearly, Michael isn't ready to see that scapegoat in the mirror," he added.
Revenue growth for the company has slowed over the last three years, hitting $61.1 billion in its last fiscal year ending in February 2008. Annual profits have declined over the last two years to $2.9 billion.
In its latest quarterly report, the company reported revenues for the last nine months up about five percent from the previous year, but revenues declined slightly to $2.1 billion. Bellwether Intel Corp. and several market researchers have projected declines in PC demand in the current quarter and stretching into 2009.
In a Q&A, Dell said the reorg was in the works before the economic downturn emerged this fall. "However, economic downturns have favored those that use such periods to sharpen their ability to execute and create new value for customers—and we're doing just that," the company said in a statement.