Round Rock-based Dell Inc. is preparing for layoffs.

KVUE News / file

The company announced Thursday that it will cut ten percent of its workforce, about 8,800 jobs, over the next year. The cuts will vary across geographic regions and job functions. No word yet on how many people in Central Texas will be affected.

The cost-cutting move was announced as the computer manufacturer released its quarterly earnings report. Dell reported net income of $759 million, down $3 million from one year ago. The numbers were better than Wall Street analysts had predicted, sending the stock up six percent in after-hours trading.

“While reductions in headcounts are always difficult for a company, we know these actions are critical to our ability to deliver unprecedented value to our customers,” said CEO and company founder Michael Dell in a statement.

John Doggett, a senior lecturer at the McCombs School of Business at the University of Texas, says some of those cuts will have to come from Central Texas.

“We’re going to lose some people, there’s no question about that,” he said.

Doggett says over the past five years, the company’s workforce has more than doubled in size, yet sales have not kept pace to maintain the increase.

“A perfect example is last year.  Sales went up 2% (while) their employee headcount went up 26%.  That wasn’t sustainable,” he said.

Doggett says there is strong reason for optimism though.  Since Michael Dell retook the reins of the company, the CEO has helped reshape the company from the inside-out.

“I’ve talked to a lot of people, from very senior members of his management team to new people who have just joined who are former students of mine, and they all say Michael is excited about what the company is doing, he is re-engaged, and this has his fingerprints,” he said.

Doggett believes the future is bright for Dell.  The company is adding retail sales, which Doggett says will boost the bottom line.