Big Dell Layoff Coming?? (Nash: home, rent, work)

[Jenbar]

Contractors in several groups have been let go recently.

[RoundSparrow]

Dell Announced 8,800 job cuts today:

Bloomberg.com: Worldwide

This must have been what the rumors were all about. That is 10% of Dell!

[fil]

Before recently moving to Austin, I watched the movie "Fun with Dick and Jane" with Jim Carrey.

I immediately equated Round Rock and Dell to the movie situation...the company dies, layoffs, and the $600K homes that the over-extended yuppies mortgage are worthless.

Bottom line OP, don't buy in RR, Lake Travis, or Lakeway.

There's a lot of inventory of $500K-$1M homes that have been on the market for +1yr.

When I was researching MLS listings in November, I saw Lake Travis $600K-$800K homes that were on the market for +3yrs, not good.

From an investment perspective, I don't see why anyone lives and commutes all the way from Bee Caves, Lakeway, or Lake Travis.

Central and downtown Austin *should* withstand any downturn at Dell.

[pvaustin]

Originally Posted by fil

Before recently moving to Austin, I watched the movie "Fun with Dick and Jane."

I immediately equated Round Rock and Dell to the movies situation...company dies, layoffs, and $600K over-extended yuppies are left with nothing.

Bottom line OP, don't buy in RR, Lake Travis, or Lakeway.

There's a lot of inventory of $600K-$1M homes that have been on the market for +1yr.

When I was researching MLS listings in November, I was seeing Lake Travis $800K homes that were on the market for +3yrs, not good.

Central and downtown Austin *should* withstand any downturn at Dell.

ok...but i am not sure if i understood the point you are making. Buy only in downtown?!!!!!

[fil]

No, avoid RR in general and avoid the trendy locations at the extremities of Austin such as Lakeway and Lake Travis if you're buying homes +$600K.

[atxcio]

I think fil's point, and it makes perfect sense, is to buy in established neighborhoods that have seen appreciation over a long period of time -- not ones that have appreciated quickly in the short term. Really, none of them are downtown (actual downtown is more like the suburbs in that sense, lots of new construction, investors, and speculative climate).. I think fil is meaning more central neighborhoods, within the city limits or very close -- NW Hills, Tarrytown, Clarkesville, Hyde Park, Westlake, Rollingwood, etc. Prices are higher, and values will appreciate very well in good years, but your downside exposure is much less. I'm sure someone here can explain it in actual real estate terms..

As an aside -- I wouldn't worry too much about Dell. I think there will be ugliness in the short term as they restructure to change their cost model.. but the Wal-Mart deal is a classic roll of the dice, and Dell made their biggest gains when they were more focused on price point. It's good to see that they haven't become so risk-averse that they wouldn't mess with their direct model. The venture-into-new-product-categories strategy has never worked for Dell. They aren't Apple, and don't have the stomach and deep pockets of Microsoft.. who will basically copy any successful idea, and attempt to eventually win by attrition. Worked pretty well for the XBox, not so good for the Zune or their search engine.

[Austin97]

Originally Posted by fil

No, avoid RR in general and avoid the trendy locations at the extremities of Austin such as Lakeway and Lake Travis if you're buying homes +$600K.

Lakefront and lakeview on lake travis should be ok.

[Roma]

I also heard that Dell got sued by a class action lawsuit regarding customer service. I heard that Dell has to pay a lot of money for that suit. I wonder if the layoffs have anything to do with the lawsuit?

[pvaustin]

Originally Posted by Roma

I also heard that Dell got sued by a class action lawsuit regarding customer service. I heard that Dell has to pay a lot of money for that suit. I wonder if the layoffs have anything to do with the lawsuit?

Any big company out there will have to deal with law suites. And if there is any such law suit against Dell that wouldn't be the first for Dell. And definitely it wouldn't lead to lay-offs for a company of Dell's magnitude.
The current lay-offs are part of company's revival plans. From an investor's perspective its in the right direction.

[pdxtech]

Originally Posted by pvaustin

Any big company out there will have to deal with law suites. And if there is any such law suit against Dell that wouldn't be the first for Dell. And definitely it wouldn't lead to lay-offs for a company of Dell's magnitude.
The current lay-offs are part of company's revival plans. From an investor's perspective its in the right direction.

Very good point. Actually, I think the entire semiconductor/computer industry is
going through a change globally and in the end Austin companies should come out
stronger. Freescale is private (not being a part of Wall street's quarter-to-quarter
madness helps) and they will figure it out. AMD is going through a crunch at the moment
but it has always been David vs Goliath (Intel) for them. Dell has new (original) leadership
now. Silicon labs got bought by NXP and they are private too. Austin has a
large educated work force with a world class university and a good venture
capital/startup presence. These things always help in the long run.