"Within our business, we're being very disciplined in managing costs, generating profitability and cash flow, and investing in ways that separate Dell from others today and when the economy inevitably improves," Dell said.

Predicting how long the recession will last is difficult, Dell said during a conference call. The company can't fight the recession, so it will focus on elements it can control, such as cutting costs, Dell said.

In the fourth quarter, the company cut operating costs by shutting down factories and by outsourcing hardware manufacturing, he said. The company has reduced the manufacturing cost of each PC by about 5 percent, Dell said.

Similar measures will probably be taken to meet the additional $1 billion cost-cutting measures by the end of fiscal 2011, wrote John Spooner, senior analyst at Technology Business Research, in a research note.

"We expect Dell's belt-tightening to involve additional layoffs and plant closings within the company's North America organization," Spooner wrote.