On Wednesday, Dell announced the departure of global operations chief
Dell also said Wednesday it will reorganize its commercial businesses into three areas: large enterprise, public sector and small and medium businesses, in order to service business customers better.
The departures come after a difficult year for Round Rock, Tex.-based Dell. Like other computer makers, it faces slower demand amid a global recession. Those customers still purchasing computers are increasingly moving downmarket to smaller machines with slimmer profit margins. The company has also had difficulty generating consistent profits from its consumer division and has seen its business with corporate buyers begin to shrink.
Since the beginning of the year, Dell's stock price has fallen 58%. On Wednesday, the company's shares rose
Analysts said the departure of the two executives indicated the company's restructuring, which started in March, might be foundering. Cannon, who joined Dell in
"We view major executive departures as negative given the implications around Dell's turnaround plans," Barclays Capital analyst
Tim Ghriskey, chief investment officer of
"All we know right now is that there's some new people, and a new structure," he said.
Cannon will be succeeded by
Dell has already reduced headcount by 10%, or around 8,800 employees, as part of its cost-cutting measures. It's also closing a desktop manufacturing facility in
Dell's new consumer division hasn't delivered regular profits and growth in Dell's worldwide corporate and government divisions - which account for more than 80% of the company's annual revenues - dropped 6% in the quarter that ended