Dell, which is set to use the 2010 CES show in Las Vegas to launch a new tablet notebook ahead of the Apple tablet launch in March 2010, has been forced to slash 700 jobs as the company struggles to compete in what has bee described as a tough PC market.

Last month Dell reported a 54 per cent drop in quarterly profits as consumers stopped buying Dell online in favour of notebooks purchased via a mass retailer. JB Hi-Fi also refused to range Dell notebooks in its stores; however it is offering Dell notebooks online via the JB Hi-Fi website.

Last night Dell said that it will lay off 700 workers in Malaysia in a bid to cut costs.

The Dell representative said the employees, about 15 per cent of Dell’s workforce in Malaysia, will receive compensation.

The plant will stop making notebooks for the United States, Canada and Latin America, but it will continue to produce notebooks, desktops and servers for South Asia and Australia, Dell said.

Dell has been hurt more than its peers because of tightened spending by corporations and large government agencies, which make up 80 per cent of Dell’s revenue.