Dell announces major layoffs amid shift to AI

Dell Technologies has recently initiated a significant restructuring process, resulting in substantial layoffs. According to the company, this is part of its strategic pivot towards artificial intelligence (AI) products and services. 

However, the firm has not disclosed the specifics of the number of affected employees. It is estimated that around 10% of the workforce is affected by this or about 12,500 employees. The restructuring mainly impacts Dell’s sales organization and several employees, including some who have been with the company for a long time. 

Dell outlines severance package details

Dell has claimed that this reorganization is intended to make the company more efficient and capable of driving innovation and providing superior customer service. In a statement to The Register, Dell confirmed that the restructuring is aimed at increasing the company’s profitability. The restructuring entails the integration of the teams and the re-evaluation of the investment strategies in order to boost innovation, value, and customer satisfaction. 

The affected employees are to be given packages that entail a payment of two months’ wages and an extra week for every year of service, but not exceeding 26 weeks. It may also include potential partial bonus payouts.  

These layoffs are quite massive and indicate that Dell has downsized its employee count, which stood at about 120,000 people as of February 2024. This week’s cuts are expected to affect approximately 10% of the company’s employees. 

Over the past 15 months, Dell has cut its workforce by 24,500 employees, and before that, in the last fiscal year, it had cut down 13,000 employees. These earlier cuts included a large part implemented in February of the previous year. Ian Armstrong, a former UX design team member at Dell, referred to the recent layoffs as a “bloodbath.” 

Dell’s cuts coincide with Intel’s massive layoffs

The timing of Dell’s announcement comes at a time when Intel has laid off many of its employees. In its recent announcement, Intel stated that it would be dismissing 15% of its employees, which translates to 15,000 people. This move comes after Intel suffered a 26% decline in its stock value that can be associated with problems with the company’s Raptor Lake chips. The tech industry is also affected in a way that involves a sharp drop in the stock market, which affects Vanguard, Fidelity, TD Ameritrade, and E-Trade, among others.

This has resulted in an upsurge of posts on LinkedIn and discussions on forums such as “thelayoff. com”. Dell’s Human Resources department has been said to be struggling, which has led to claims of inadequate communication with affected employees. 

However, Dell still believes in the future development of the company, especially with the help of the highlighted AI. The firm is experiencing enhanced investor interest owing to the fact that the firm has come up with its next generation of advanced servers which are purposely designed for AI. Also, Dell expects that a new generation of PCs specially designed for AI will be the future and lead to future upgrading and growth.