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Dell shakes up management ranks, shifts focus

January 01, 2009|Bloomberg News

Dell Inc. shook up top management Wednesday as it continued to strive to revive sales amid a worldwide recession.

The computer company replaced Michael Cannon as president of global operations and Mark Jarvis as chief marketing officer. Cannon will be succeeded by Jeff Clarke and Jarvis will be replaced by Erin Nelson as part of a global reorganization, Dell said.

Founder Michael Dell, who reclaimed the chief executive title two years ago, is trying to win back the PC sales lead held by Hewlett-Packard Co. He has ditched the company's direct-sales-only model to jump-start revenue growth and cut more than 11,000 jobs to reduce costs.

"This restructuring is in response to mediocre results," said Roger Kay, president of researcher Endpoint Technologies Associates Inc. in Wayland, Mass. "It is not enough. They do need to work on their product portfolio and their supply chain and distribution."

The company last quarter posted sales that trailed analysts' estimates by more than $1 billion. Revenue from the Americas, which make up almost half the total, fell 7.7% after customers pared budgets to shield themselves from the recession.

Shares of Round Rock, Texas-based Dell rose 1 cent Wednesday to $10.24.

The departure of Cannon reverses one of the first management moves Michael Dell made after returning to the helm of the company in January 2007. Dell hired Cannon, former chief executive of Solectron Corp., the next month. Ron Garriques, former head of Motorola Inc.'s handset unit, was brought in the same month to run Dell's consumer business.

"You never like to see that kind of upheaval, particularly with hand-picked people so high up in the organization," said Paul Meeks, a principal with Charleston, S.C.-based Winsor Asset Management. "Then again, Dell has been criticized for not moving fast enough in the past."

Clarke, Cannon's replacement, will keep his duties as head of the business-client product group. Nelson, Jarvis' successor, is currently vice president of marketing in Europe, the Middle East and Africa.

Dell said it would reorganize its business units globally around three customer groups: large enterprises, public sector and smaller companies. Garriques' consumer unit already is organized globally.

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