In a strategic move to realign its business towards the rapidly evolving field of Artificial Intelligence (AI), Dell Technologies has announced another significant round of layoffs. The company will be cutting approximately 12,500 jobs, accounting for about 10% of its workforce, as part of its ongoing restructuring efforts. This decision comes on the heels of a previous reduction of 13,000 jobs last year.
According to an internal memo from Dell executives Bill Scannell and John Byrne, the layoffs are part of a broader initiative to “streamline management layers and prioritize investments” that are critical to the company’s future growth. The memo, titled “Global Sales Modernization Update,” emphasizes the need to adapt to the AI era by reorganizing Dell’s global sales teams and focusing resources on areas that promise higher returns.
Dell’s move is seen as part of a larger trend within the tech industry, where companies are increasingly focusing on AI as a key driver of future growth. However, despite the optimism around AI, the technology has yet to significantly boost productivity or profits across the sector. Dell aims to position itself as a leader in AI-driven hardware, particularly in the data center and enterprise markets, but faces stiff competition from other tech giants.
This round of layoffs is expected to impact a wide range of employees, including managers and senior staff with decades of experience. Affected employees are being offered severance packages, which include two months of wages plus an additional week for every year of service, capped at 26 weeks. However, the loss of long-term incentives and stock options has sparked discontent among some employees.
As the company navigates these changes, its workforce is projected to fall below 100,000 employees globally, down from 120,000. This contraction reflects both the challenges Dell faces in its core PC business, which has struggled post-pandemic, and its ambition to capitalize on the AI revolution.
Dell’s layoffs are part of a broader trend of job cuts in the tech industry as companies like Intel, Microsoft, and others also reduce their workforce in response to shifting market dynamics and the pressures of integrating AI into their operations.
