In response to the analysis report written by strategy+business, "":
After 13 years, I think I can finally speak my mind on all this "Dell is wonderful" crap. The story "How Dell got soul" surely missed a few important facts about what Dell was like in its early days.
I was employed by Dell in 1988, having left Bell Northern Research (now part of Nortel Networks) after a round of layoffs. I started in a just-created group to do hardware testing run by a couple of fellows who started with Michael Dell, not long after he took the company out of his dorm room. From there, I went into the ill-fated Dell Unix group. That's right: Dell had its own PC Unix product in 1988. Never mind that Michael missed the boat on. Let's get to your story.
To say Dell's first layoff occurred in 2000 is completely false. In 1991, Dell "let go" about 200 engineers over the span of three months. Some were fired. Some large-scale integration designers were transferred to front-line tech support for a third of their salaries. That move was an obvious attempt to show these guys the door. Keep in mind that 200 out of a couple thousand is a pretty hefty chunk.
When BNR laid off its large staff, it offered everyone packages reflective of their term of service and provided them counseling and office space from which to search for new work. No one likes to be laid off, but at least that company showed compassion enough to help its people move on. Dell did no such thing. In fact, morale was so poor that summer that most engineers just came in to find out who had been let go that day. No work was planned, and nothing got done.
Michael Dell was always interested in commodity (read: shoddy) products and viewed anyone who made them as cattle. It's possible that the man has changed since then. Perhaps his vice-president squad was the real problem. But responsibility for these kinds of actions always rises to the top.