Computer maker Dell is to cut around 8000 jobs, or 10 per cent of its workforce, despite posting an increase in both first quarter sales and profits.

The world’s second largest PC maker will make the cuts over the next 12 months in a bid to revive slumping company fortunes after a string of difficulties. In the first quarter last year, Dell issued a profit warning as its PC market share fell 10 per cent, while rival HP's grew 22 per cent.

This year's layoffs will be spread across business groups and geographic regions, says chief executive Michael Dell.

‘While reductions in headcount are always difficult for a company, we know these actions are critical to our ability to deliver unprecedented value to our customers now and in the future, said Dell.

Dell actually posted improved first quarter results, beating analyst expectations, with sales rising one per cent to $14.6bn ($7.4bn) and profits up from $762m (£385m) to $947m (£478.5m).

Dell is not the only IT firm tightening its belt. IBM said this week it will cut a further 1500 jobs, on top of the 1300 reductions worldwide earlier this month.

And Motorola plans 4000 job cuts in response to tough global competition. It expects to save $600m (£304m) in annual costs.