Dell released preliminary earnings on Thursday showing positive signs in its servers unit, but announced it would lay off 10 percent of its workforce over the coming year.

With a current worldwide workforce of 88,000, approximately 8,800 employees will be let go over the next year as Dell tries to trim costs. The staff reductions will "vary across regions, segments and functions," according to Dell spokesman David Frank.

A bright spot was Dell's server segment, which topped all of the company's businesses with 19 percent growth from a year ago. Notebook revenues were up 7 percent and desktops declined 6 percent.

Dell has been attempting to turn itself around in the last year after losing its lead as the world's largest PC maker to Hewlett-Packard in 2006. It's seen heavy turnover in leadership, including the return of founder Michael Dell as chief executive, replacing Kevin Rollins.

The company's traditional direct sales model will also be tweaked slightly to compete better with HP and others. Last week, the PC maker announced that it will sell two of its desktop models at Wal-Mart.

Dell is also in the middle of an SEC investigation into its accounting practices. In its earnings announcement, Dell said it has incurred US$46 million in costs related to the federal probe. The investigation is ongoing, preventing the company from filing anything more than preliminary reports for the previous three fiscal quarters. For the same reason, Dell has declined to hold the traditional earnings call with analysts and the media.