Analysis:The announcement that Dell would shed 10 per cent of its global workforce came as a surprise. But it was clear the fomer number one computer maker had to take radical steps to get itself back on track, writes John Collins.

The company has had a string of poor financial results and is also under investigation by the US Securities and Exchange Commission over the way it handles its accounts. It has faced increased competition, in particular from a resurgent Hewlett-Packard, which last year overtook it as the world's number one PC maker.

This was the first full fiscal quarter in which company founder Michael Dell was back at the helm following the departure of Kevin Rollins as chief executive. Since the former McKinsey management consultant left late last year, Mr Dell has totally reorganised senior management and is conducting a comprehensive review of the company's business.

Speculation has once again grown that Dell may decide to abandon its Limerick manufacturing base. With Dell completing a second European factory in Poland that will initially employ 1,000 staff, at least 9,000 jobs will need to be shed worldwide to reduce the headcount by 10 per cent.

The €200 million factory in Lodz is expected to begin production this autumn but it will be some years before it reaches full capacity. The design of the factory is based on Dell's Raheen facility which, up to this point, was its only manufacturing base in Europe.

Last September, Dell senior management reassured Irish media that the Polish operation would complement Ireland rather than replace it.

Mr Rollins said then that the company's Irish manufacturing operations in Limerick would continue to "meet the needs of customers in parts of Europe" but that an eastern European manufacturing facility was essential to be "close to customers" in emerging markets.

Not all 3,000 staff in Limerick are involved in manufacturing, with complex European support and sales functions also located there - jobs that are less likely to be moved to a low-cost location.

Dell styles its Cherrywood, Co Dublin, operation as an EMEA Business Campus. It provides sales and support to Dell customers in Europe, the Middle East and Africa and is also the marketing headquarters for the region.

Dell is the State's second largest employer and the largest exporter based here. The Texas company was established in Ireland in 1990.