Dec. 31 (Bloomberg) -- Dell Inc., the world’s second-biggest personal-computer maker, replaced Michael Cannon as president of global operations and Mark Jarvis as chief marketing officer as it strives to revive sales amid a worldwide recession.

Cannon will be succeeded by Jeff Clarke, and Jarvis will be replaced by Erin Nelson as part of a global reorganization, Dell said today in a statement. Both will leave by the end of January. Both Clarke and Nelson already work for Dell.

Founder Michael Dell, who reclaimed the chief executive officer’s title two years ago, is trying to win back the PC sales lead held by Hewlett-Packard Co. He has ditched the company’s direct-sales-only model to jump-start revenue growth and cut more than 11,000 jobs to reduce costs.

“This restructuring is in response to mediocre results,” said Roger Kay, president of researcher Endpoint Technologies Associates Inc. in Wayland, Massachusetts. “It is not enough. They do need to work on their product portfolio and their supply chain and distribution.”

The company last quarter posted sales that trailed analysts’ estimates by more than $1 billion. Revenue from the Americas, which make up almost half the total, fell 7.7 percent after customers pared budgets to shield themselves from the recession.

Dell, based in Round Rock, Texas, rose 1 cent to $10.24 in Nasdaq Stock Market trading at 4 p.m. New York time. The stock has lost 58 percent this year.

New Business Units

The departure of Cannon reverses one of the first management moves Dell made after returning to the helm in January 2007. Dell hired Cannon, the former CEO of Solectron Corp., the next month. Ron Garriques, the former head of Motorola Inc.’s handset unit, was brought in the same month to run Dell’s consumer business.

“You never like to see that kind of upheaval, particularly with hand-picked people so high up in the organization,” said Paul Meeks, a principal with Charleston, South Carolina-based Winsor Asset Management. “Then again, Dell has been criticized for not moving fast enough in the past.”

Clarke, Cannon’s replacement, will keep his duties as head of business-client product group. Nelson, Jarvis’s successor, is currently vice president of marketing in Europe, Middle East and Africa.

Dell said it will reorganize its business units globally around three customer groups: large enterprises, public sector, and smaller companies. Garriques’s consumer unit already is organized globally.

Trailing Hewlett-Packard

Steve Schuckenbrock, currently president of global services and chief information officer, will head the unit serving Dell’s largest corporate clients.

Paul Bell, currently head of Dell Americas, will lead the unit aimed at government and education customers. Steve Felice, now chief of Dell Asia-Pacific Japan, will run the unit targeting small and medium businesses.

The changes allow Dell to be closer to its customers, spokesman David Frink said. The reorganization also aligns the company better with its strategy of selling more to consumers, businesses, and customers in emerging markets, he said.

Dell has eliminated about 13 percent of its workforce from a peak last year. The company is aiming to save $3 billion a year by 2011, while expanding sales to almost 20,000 retail outlets, including Wal-Mart Stores Inc. and Best Buy Co.

Dell also overhauled its manufacturing, limiting the number of options for custom computer orders, and now relies on contractors to make a quarter of its products, mimicking the production strategy of Palo Alto, California-based Hewlett- Packard.

Hewlett-Packard, which has held the PC market lead for more than two years, had 18.8 percent of the market last quarter, El Segundo, California-based researcher iSuppli said this month. Dell had 13.9 percent.

Worldwide spending on information-technology products will shrink 4 percent next year as the economy contracts, according to a report this month from Goldman Sachs Group Inc. Sales in the U.S., Western Europe and Japan, which account for 65 percent of total spending, will slide 8 percent, Goldman Sachs said.

To contact the reporter on this story: Melita Marie Garza in New York at mgarza4@bloomberg.net

Last Updated: December 31, 2008 16:04 EST