Cost cutting has already begun. The PC maker had already cut temporary workers. Today's job reduction will lop off around 4 percent of its permanent work force. Overall, the company is aiming to reduce operating expenses by around 8 percent, analysts say. Before the warning, a consensus of analysts polled by First Call expected earnings per share of 25 cents for the quarter and 91 cents for the year.
Analysts also expect the company to lower growth expectations.
A few years back, Dell grew at an annual clip of 50 percent. In 1999, it warned that growth would slow to 30 percent and later scaled it down to 20 percent. Some analysts believe the number could go down again. Although Dell's current financial performance pales by its own history, it is likely to be outstanding compared with the industry as a whole, with revenue growth expected to be 25 percent to 27 percent. Dell Stock price from February 2000 to present.