Dell closes hardware design unit in India

Dell Inc. will phase out its hardware design unit in Bangalore as it relies more on contract manufacturers capable of doing design to get its products to market.

Dell told employees at a meeting on Tuesday that the center will now focus on software development, and hardware design will be shifted from Bangalore to design centers in Austin and Taiwan, according to sources. Dell had hinted at this move some months ago, and had linked it to Dell's strategy to use more contract manufacturers, or ODMs (Original Design Manufacturers), to design its products, the sources said.

Set up in 2004, the hardware design operation was relatively new in India in comparison to the software development work being done in India by Dell.

A Dell India spokeswoman said on Thursday that the decision to move hardware design out of India reflected a decision by the company to focus on software development, testing, and documentation in India. "This is in line with our higher focus on solutions, which requires a lot of software development," she said.

The company had over 500 staff doing software development and hardware design in India, and of these less than 100 will be affected by the phasing out of hardware design in the country, the spokeswoman said. The hardware design unit had designed a dual-socket server and a storage product, she said.

The Times of India newspaper reported that estimates of the number of people losing their jobs as a result of the shift vary from a few dozen to about 170 people.

Besides software development and hardware design, Dell also has customer support centers in India, that service its customers worldwide. The company announced last year that it plans to double the number of staff it employs in India to 20,000 in three years.