One of Dell's Irish subsidiaries reported a huge fall in revenues in the year to the end of January 2003, the same period that it moved certain functions to India, Jamie Smyth reports.
Turnover at Dell Direct, the Dublin-based call centre and services unit of the US computer manufacturer Dell, fell to €99.2 million, down from €148 million in the 12 months to January 2002.
Despite the dramatic slump in turnover, Dell Direct maintained pre-tax profit at €10.7 million in the year to the end of January 2003, slightly down on the €10.9 million achieved in the previous 12 month financial period.
Industry sources said the huge dip in revenue could reflect a restructuring of Dell's call centre and services unit during the year.
During 2002-2003 Dell, which employs more than 4,200 full- time staff in the Republic, relocated technical support functions from its Bray and Cherrywood sites to Indian call centres in a move to increase efficiency.
In a statement to The Irish Times Dell said the reduction in turnover did not reflect the transfer of activities to India.
However, it refused to comment further about the fall in revenue at the services subsidiary.
The transfer of functions to low-cost locations such as India is a sensitive issue for Dell, which indicated last April that it would consider capping employment at its services division in Dublin.
Dell Direct provides data processing services and telemarketing services to British, Irish and some European customers.
Despite the fall in revenues at the unit, staff numbers actually increased during 2002, reaching 1,148, up from an average of 1,076 in 2002.
Staffing costs also increased to €54.4 million, up from €44.9 million in the year to the end of January 2002.
The results, which were recently filed with the Companies Registration Office in Dublin, note that Dell Direct has a commission agreement with another Dell group company, Dell Products, which reimburses all costs incurred in providing the services to customers.
The company also receives a commission from Dell Products based on the percentage of the sales value of the orders processed under the agreement.
Meanwhile, Dell Computer, the Limerick unit that repairs computer equipment, boosted its turnover to €167.5 million in the year to the end of January 2003, up from €133.9 million in the previous 12 months.
The division posted a pre-tax profit of €4.9 million in the year to the end of January 2003, up from €3.9 million in 2002.
This strong performance mirrors the position of Dell's global operation which has managed to increase market share and grow sales despite the slump in the computer industry since 2001.
Obtaining an accurate breakdown of Dell's operating performance in the Republic is extremely difficult because it only files results for certain subsidiaries.
But the company- which last year overtook Microsoft as the biggest revenue generating technology firm in the State - has for the first time supplied profit figures for several of its Irish units to The Irish Times. The figures for the period to the end of January 2003 - listed in either dollars or euros - show six Irish Dell subsidiaries making pre-tax profits.
These show profits of: $132 million for Dell Products; $122 million for Dell Products Europe BV; €10.7 million for Dell Direct; $4.1 million for Dell Computer; $14 million for Dell Research; and $3 million for Dell Financial Services.
Dell provides sales and support to the Republic and Britain from sites in Dublin.
It also employs a further 3,400 full-time staff at its European manufacturing hub in Raheen, Limerick.
