Dell Malaysia is said to be offering Voluntary Separation Scheme (VSS) to some 5,000 of its staff in Penang and Cyberjaya plants, and expects 5% to take up the offer.

Sources said the Manpower Department has been informed of the company’s decision to reduce its organization size in the country.

A Voluntary Separation Scheme is part of a restructuring exercise by a company which is in the process of reducing its workforce size. A worker involved in such program will be offered termination benefits that take account the years of service rendered by the worker – the longer the service, typically the better the benefits.

As opposed to retrenchment, VSS is a work termination program which is optional to the workers.

One of the successful major VSS programs was done back many years ago by TM (formerly Telekom Malaysia) when Datuk Abdul Wahid Omar took over the helm as the new CEO of TM. He has since joined Maybank as the bank’s new chief.

Dell has been operating in Malaysia for over 14 years, and is considered one of the most successful technology investors in Penang before rumors about its commitment in Malaysia started spreading in recent months. Dell is presently the world’s second largest computer maker, behind its great rival Hewlett Packard.

Dell workers in Ireland suffer a major blow after the company announced its decision to slash the workforce in the country and move its European manufacturing facilities to Poland.

About 1,900 Dell employees, which make up more than 40% of the total 4,300 workers in Ireland, will lose their job in a series of retrenchment exercises.

The layoff will start in April and is expected to end early in 2010. By then, Poland will officially be hailed as Dell’s new center in Europe.

Poland is chosen as a new European manufacturing center for its laptops and desktops due to its relatively cheaper labour and operation cost.

Dell is a key investor in Ireland and is the second largest employer in the country at the moment with contribution about 5% to the country’s growth domestic product. The move is also devastating news to many contractors and vendors which have been relying on businesses from the world’s second largest computer maker.

The remaining of the workers who are unaffected comes from the sales and marketing as well as research and development divisions.

Few months ago, Dell was rumored to be looking for buyers for its facilities in Penang, Malaysia as the company is struggling to face the sluggish economy but it later announced its commitment to stay. Its Penang manufacturing operation serves the Asian market and produces up to 95% of the company’s notebook.

Despite the recent uncertainty over the future of Dell Malaysia, the company has made a fresh pledge to continue operating in the country, and retain their staff, with perhaps minimal layoffs.

The world’s second biggest computer maker made headlines a few months ago when reports said the company was looking for an exit and was talking to a few interested buyers for their plants.

Though it wasn’t confirmed which plants would be affected in the sale, its Penang factory looked like as one of the possible candidates, alongside Dell’s plants in other countries including United States, Ireland, China, Brazil and Poland.

Dell closed its Austin plant this year, eliminating more than 2,000 jobs to save $3 billion in operation expenditures but that was as far the story goes. Other closures and sell-off did not materialize.

A few days ago, Steve Felice, the President of Dell Asia-Pacific came out in the open and revealed that Dell’s plants in Asia are doing fine at the moment and that the company intended to keep the headcount stable.

He however declined to comment about Dell’s plan in the year 2009 when the country is expected to edge closer to recession and if there would be any retrenchment taking place. One thing for sure, new investment in the form of plant addition or expansion looks very unlikely for Dell.

In Malaysia, Dell currently operates in Penang and Cyberjaya, providing jobs for approximately 3,000 people.

The fate of over 1,500 Dell employees in its Penang factory has been put into doubt after recent news disclosing the possibility of the company selling its factories to potential buyers.

The Wall Street Journal and Financial Times were among the first international media which covered the news, followed by local newspapers yesterday, including NST.

It is said that Dell has approached a number of contract and EMS (Electronic Manufacturing Services) manufacturers about the possible plan of taking over the plants’ operation. It wasn’t clear about which countries will be affected with the move but it will be one or more from 6 of the countries Dell currently operates in – United States, Malaysia, China, Brazil, Ireland and Poland.

Many see it as a move by the company to follow their closer rivals – Hewlett Packard (HP) and Apple in outsourcing their manufacturing function and instead focus on the design and marketing work.

Presently, Dell employs close to 30,000 people worldwide. Between 2007 and 2008, under the helm of the come-back CEO Michael Dell, the company underwent a series of plant closures and redundancies of workers, which slashed the company’s workforce by 9,000 people, representing a 10% shrink in employee size.

Apart from the manufacturing facility, Dell also has a cell center and customer support operation in Bayan Lepas, Penang, employing more than 1,000 staff working around the clock. Dell is often considered among the top manufacturing companies to work in Penang as well as Malaysia.

In 2006, Dell was ranked by Fortune among the world’s 25 largest companies, and was in the top 10 in the most admired companies listing.