Dell plans to close its desktop computer manufacturing plant in Winston-Salem by January, and lay off 905 employees.
Dell opened the assembly plant in 2005 and was offered a massive incentives package valued at $305 million if it met hiring and investment goals.
The project was seen as a major economic development victory by supporters and a huge waste of taxpayer money by critics.
About 600 workers at the Forsyth County plant will be let go next month, Dell announced Wednesday. The rest will be out of work by early next year.
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"This is a difficult decision, especially for our North Carolina colleagues, but a necessary one for Dell customers and our company," vice president Frank Miller said in a prepared statement.
The closure of the plant is part of a broader cost-cutting effort by Dell, which is trying to offset weaker PC sales worldwide during the recession. The company wants to save $4 billion a year by 2011.
Under the incentives agreement, Dell was required to invest $100 million, create 1,700 jobs by September 2010 and maintain those jobs for 10 more years. If those terms weren't met, the company would forfeit the incentive package.
Dell said it would comply with the terms of the incentive agreement.
In June, Dell sold its Lebanon, Tenn., remanufacturing plant to Genco. In January, Dell said the company would move its Ireland manufacturing operations to Poland, a process still ongoing.
Dell has plants in Miami, Nashville, Austin, Texas, Brazil, Ireland, Poland, China, Malaysia and India. It also partners with other manufacturers to make certain products.