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A little more than three years after being toasted as a game-changing player in the Triad’s economy, Dell is laying off workers at its Forsyth County computer assembly plant.

Dell wouldn’t say Wednesday how many people will be affected, but reports said 70 to 300 people are being let go.

The company told top Winston-Salem leaders that the cuts at the computer  plant would affect a small percentage of its 1,400 workers, Mayor Allen Joines said Wednesday afternoon. The company is expected to give him a full count today.

“We’ve talked with the state Department of Commerce people,” said Gayle Anderson, president of the Winston-Salem Chamber of Commerce. “They haven’t given them a number either.”

Dell said in February that a nosedive in computer sales in its fiscal fourth quarter caused its profit to drop by 48 percent.

Dell spokesman Venancio Figueroa said Wednesday’s action “goes back to streamlining our business for more than a year now.”

Forsyth scored a major recruiting win in 2004 when Dell said it would bring its $100 million factory and 1,700 jobs to the area.

The state General Assembly authorized tax credits worth up to $225 million over 15 years for the company. With local incentives, that amount could climb to $280 million.

Dell has invested $112 million, which exceeds the minimum required to earn capital investment incentives from Winston-Salem, Joines said.
But the factory must also create 1,700 jobs by 2010 to qualify for all its incentive money, said Derwick Paige, a Winston-Salem deputy city manager.

Winston-Salem is making full payments of $535,000 a year already, but Dell must pay back a percentage of that money if it falls short of the 1,700 jobs mark.

Joines said the city is already reaping $600,000 a year from Dell in property tax for a net gain in revenue.

Dell’s incentive package has attracted at least one major lawsuit that says state and local governments won’t recoup the cost.

The lawsuit, filed by former N.C. Supreme Court Justice Robert Orr, noted that although the state agreement would not reach its full potential until Dell has hired 1,500 workers, it allows Dell to cut up to 40 percent of its work force after that with no penalty.

The lawsuit was later dismissed by the N.C. Court of Appeals.

Anderson said the latest cuts at Dell do not vindicate critics of incentives.

“The way that incentives are done here is a very responsible approach in that it’s based on a combination of investment in equipment and plants and facilities as well as the jobs that are created,” she said. “The property tax (revenue) won’t change.”

And with strict employment targets for Dell, taxpayers have a guarantee that they’ll never pay too much, Anderson said.

“To those critics, I would say we still have a very, very active manufacturing operation that still has 1,000 people working there today,” Anderson said. “I think we invested well.”

Contact Richard M. Barron at 373-7371 or richard.barron@news-record.com