Dell's restructure: will it work?

Filed in archive strategy on January 1, 2009

Dell is in serious trouble. Its shares have fallen nearly 60% over the past 12 months and the company is desperately trying to regain the market share it ceded to Hewlett-Packard.

Things have got so bad that the company on New Years Eve announced a radical shake-up which will see the departure of Mike Cannon, president, Global Operations and its chief marketing officer Mark Jarvis (read the release carefully, they buried the real new right on the bottom).

It's a significant announcement because Michael Dell had tapped Cannon for the job in 2007. This announcement is further confirmation that Michael Dell stuffed up badly.

Whether these changes are a good sign is up for debate. Analysts have told CNN Money that Dell plans to lay off more employees in the first half of 2009, and that the restructuring could also hurt customer relationships.

The big problem, as BusinessWeek points out, is that Dell will not be going anywhere while its customers consumers, don't find its products as exciting as those made by Apple, or as easy to find in stores as HP's.

Until that's fixed, the company will continue to struggle.