Dell reshuffles management

Dell on Tuesday announced a series of management changes designed to inject fresh life into the computer maker, which has been suffering from an erosion in cost advantage, slumping margins and increased competition.

The re-shuffling comes as Dell is struggling to bounce back from a disappointing year in which it lost its top spot in the personal computer market to its arch-rival, Hewlett-Packard.

Dell said it would split its product development team, which is responsible for Dell’s future product lines, into separate “consumer” and “business” groups in order to achieve better focus.

It said it had appointed Steve Schuckenbrock, a former executive at Electronic Data Systems, to head its fast-growing $5bn services business.

Mr Schuckenbrock was most recently co-chief operating officer at EDS. Before that, he was with IBM and PepsiCo.

“Steve has worked as CIO of one of the most recognised brands in the world and as chief operating officer of one of the premier service delivery companies,” said Kevin Rollins, Dell’s chief executive, in a statement. “We believe his experience…will bring our customers a high level of understanding and innovation.”

John Medica, a 14-year veteran and head of the company’s global imaging and displays business, will retire by the end of the first quarter.

Shares in the company fell 2 per cent on Tuesday to $26.20. The shares had risen from a low of $19.91 in July but are still off from a recent high of $32 in February.

Last month, Dell shook free from the doldrums after several quarters of missed results. Although improved margins helped earnings at the company beat expectations last quarter, sales growth remained sluggish. Concerns remain that Dell’s strategy of direct sales of computers over the telephone and internet may be losing its competitive edge.

Mr Rollins, who had been under increasing pressure to restore the company’s reputation as an out-performer on Wall Street, earlier this year announced a series of initiatives, dubbed “Dell 2.0,” intended to inject fresh life into the company’s business model.