Alienware Plans Worldwide Expansion; Layoffs, Too

Dell's Alienware division will lay off employees from a number of its business units as the once-independent division becomes more closely tied to Dell's main organization and significantly expands its reach.

In a memo forwarded to ExtremeTech, Alienware general manager Arthur Lewis outlined a number of divisions that contained "redundancies" with Dell's main operations, including support organizations such as accounting, finance, operations, IT, procurement, and others. Alienware will also close its manufacturing operations in Miami and Athlone, Ireland, leaving Dell's own manufacturing operations and ODM partners to build the Alienware PCs.

Alienware also plans to offer branded software and peripherals, the memo added.

Alienware spokeswoman Winnie Wong confirmed the memo as authentic, but said she could not say how many employees would be affected. The Lewis memo indicated that the changes, including the layoffs, would be completed by the end of Dell's third fiscal quarter, which ends Oct. 31.

For Alienware, however, the moves are somewhat like pruning for future growth, as the company expands the countries it plans to serve by about a factor of seven. With the launch of Alienware's next-generation "Quicksilver" notebook product, Alienware's products will appear in 35 countries supporting 17 languages by February 2010, Lewis added, including the Nordics, Spain, Italy, Russia, China, Japan, and South Korea, and parts of the Middle East, South America, and Latin America, including Brazil.

Both Alienware's Lewis and Wong indicated that the layoffs would come as a natural consequence of expansion. "This is obviously putting two teams together into one unbeatable team," Wong said. "It's [serving] 35 countries versus 6 countries; we previously wouldn't be able to do it with the existing infrastructure."

The new product line will include a "fresh Alienware industrial design that provides a consistent language across all products," Lewis stated in the memo.

Alienware's decision would seem to run counter to the opinions expressed by Alienware chief executive Nelson Gonzalez, who explained in a 2006 .

At that time, Gonzalez did indicate that Alienware would take advantage of Dell's manufacturing. "We believe that this acquisition will offer our customers the best of both worlds --- an Alienware that takes advantage of the world-class business practices and operational efficiencies that have made Dell one of the most respected companies in the world, while preserving the DNA of the Alienware brand and product strategy portfolio," he wrote.

But, Gonzalez added, "The Alienware and Dell executive management teams have agreed that this acquisition could only succeed if Alienware is structured as a separate division which will continue to make its own product development, planning, marketing and customer support decisions. The ability to make standalone business decisions about the Alienware brand and product portfolio will be the key to our continued success and both the Alienware and Dell management teams recognize that the uniqueness of the Alienware culture and our special customer bonds are pivotal."

However, Alienware's Wong said that the Alienware brand would continue to operate independently. "We will still build the brand, still have our own position to represent the Dell gaming brand," she said. "A lot of the products' messaging will still be intact." Lewis will still oversee product development, she added.

The memo was part of the process of educating employees about the changes, she said.

"These changes, while difficult, are necessary if we are to succeed," the Lewis memo added.