Is Dell headed abroad? Its workers certainly are. In its annual report filed with Securities & Exchange Commission on Apr. 12, the PC maker disclosed that for the first time it has more employees overseas than in the U.S. Of its 46,000 workers, 23,800 were stationed in other countries as of Jan. 30.
At a time when sending jobs offshore is dampening the U.S. economy's employment recovery, that kind of news seems destined for a political stump speech. But Dell says its workforce is merely following the focus of its business, which has taken off overseas in the past few years. "We're going to put employees where our fastest growth and the biggest opportunities for growth are," says Dell spokesman Mike Maher.
Take China. Dell's shipments in that market, one of the world's hottest for PCs, grew 36% in the fourth quarter, which ended Jan. 30. So, Dell has staffed up there in manufacturing, sales, and support. Ditto for Japan, where revenues rose 26% last year. And while U.S. sales, especially to consumers, continue to expand vigorously, Dell is finding it can extract greater productivity from its existing domestic workforce.
RUTHLESS ECONOMICS. Of the roughly 7,000 jobs Dell added in 2003, only 1,000 were in the U.S. It now employs 6,600 people in the Asia/Pacific/Japan region, 6,900 in the Americas outside the U.S., and 10,300 in the Europe/Middle East/Africa region.
Yet that's only part of the story. Dell, which is always looking for more efficient means for building, distributing, and servicing its growing product line, has been one of the more active outsourcers around. It manufactures all of its notebook PCs in Penang, Malaysia. And it runs call centers in Panama and India that respond to tech-support questions from customers around the world, including the U.S. Dell even created a minor stir when complaints from some corporate customers about the quality of support they got from the Indian locale led it to reroute their calls to the U.S.
The disparity between Dell's workforce in the U.S. and abroad is likely to keep widening. The PC business' ruthless economics will force it to continue outsourcing as a way of lowering costs. And Dell has set its sights on increasing its worldwide PC market share to 30% or 40% over the next few years, from 16% today. Much of that growth will have to come in foreign markets. Bon voyage. By Andrew Park