Dell starts new round of layoffs while it looks to 'unlock modern AI'

HR apparently overwhelmed by attempt to sack 12.5K people in one day

Dell has made another round of layoffs, which The Register understands have cut deep and seen even company veterans let go.

HR exit meetings kicked off on Tuesday morning, spurring a wave of LinkedIn status changes, while others found comfort venting or trading information in online forums.

Dell confirmed the layoffs to The Register.

"Through a reorganization of our go-to-market teams and an ongoing series of actions, we are becoming a leaner company. We are combining teams and prioritizing where we invest across the company. We continually evolve our business, so we're set up to deliver the best innovation, value and service to our customers and partners," Dell told The Register by email.

The sentiment was also reportedly expressed in a memo sent to some employees as they watched colleagues pack up their belongings.

In the memo, president of global sales and customer operations Bill Scannell and global channels president John Byrne used the term "streamlining layers of management."

According to Scannell and Byrne, Dell aims to grow faster than the market by unlocking "the value of modern IT and AI" for customer organizations.

Implied was that they would be doing this without the help of an undisclosed number of newly former employees. That number has been guesstimated at around ten percent of the workforce – about 12,500 people – as part of an effort to get the overall workforce from 120,000 to below 100,000.

It is unknown if this round of cuts met that target, or if further firings will follow – particularly as many suspicious 1:1 meetings scheduled for Tuesday were allegedly moved.

As one employee put it: "There are only so many HR reps to go around." A prophetic musing, as Dell's Human Resources department was allegedly too swamped to even show up for some terminations – leaving the job instead to line managers.

Severance for most will likely involve a payout of two months wages plus a week per year served up to a max of 26 weeks, and potential partial bonus payouts. Loyal Dell graybeards have grumbled about losing long-term incentives and stock options.

Some employees have reported seeing the workforce reduction writing on the wall. "I work in advertising and recently learned that Dell's fall print budgets were cut two weeks ago, which makes sense. Additionally, Intel had issued a major RFP that they withdrew last week, just before the news broke about their mass layoffs and stock decline," claimed one employee.

"With how frequent the layoffs have been I can't trust there won't be more in the future. I've survived so far but almost half my team is gone now versus two years ago," pondered another Dell-ite who has decided to seek employment elsewhere.

One Redditor referred to the regular layoffs endured by Dell employees as the yearly "rank and yank."

Last year was special – much like this year – when it came to the numbers seen in its rank and yank. The PC giant announced a reduction of around five percent of its workforce, but ended up with double that – cutting 13,000 over the 2023 fiscal year, according to reports.

The same year, Dell called its workforce back to the office after previously promising the workplace would forever stay primarily remote or hybrid. Many saw the mandate to return as a stealth layoff that disproportionately harmed women.

Dell's layoffs come one week after Intel announced it will shed 15 percent of its payroll as the x86 giant scrambles to get its finances under control. That could be tricky as it is occupied with damage control having missed the AI market, suffered a revenue slump, confronted additional competition in the PC space, and admitted its Raptor Lake chips are frying systems.

The next day, Intel stock took a 26 percent hit.

Dell was also reportedly down three percent during afternoon trading on Monday – which, in comparison to this week's stock market wobble, seemed par for the course.

The decreased need for employees could also be sign that Dell is engaging more with partners and less with in-house sales. Many of the positions eliminated appear to come from the sales division. Last August Dell announced its Partner First For Storage strategy – an initiative aimed at boosting sales through the channel. ®

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