Dell fires 12,500 employees amid shift to AI-focused business model
Dell has conducted a fresh round of layoffs as part of its shift toward AI products and services. The exact number of affected employees has not been disclosed. However, it is estimated that about 10% of the workforce, or roughly 12,500 individuals, were impacted. The restructuring has primarily affected the company's sales teams, including long-standing employees. The tech giant confirmed this development in an email to The Register, stating that it is "becoming a leaner company" through this reorganization.
Dell's restructuring aims to enhance innovation and customer service
Dell's restructuring involves merging teams and prioritizing investments across the company. The goal is to enhance innovation, value, and customer service. In a memo to employees, Bill Scannell, President of Global Sales and Customer Operations, and John Byrne, Global Channels President at Dell, discussed "streamlining layers of management." They emphasized Dell's ambition to outpace market growth by leveraging "the value of modern IT and AI" for client organizations.
Severance packages and employee reactions
Most employees affected by the layoffs, are expected to receive a severance package comprising two months' wages, plus an additional week for each year of service, up to a maximum of 26 weeks. This may also include potential partial bonus payouts. However, some long-term employees have expressed dissatisfaction over losing long-term incentives and stock options as part of this process.
Future plans of the company
Despite the layoffs, Dell remains optimistic about its future, particularly with its new focus on AI. The company has seen a resurgence of investor interest due to its high-powered servers capable of running AI workloads. Dell is also hopeful that a new generation of AI-optimized PCs will fuel upgrades. "We aim to grow faster than the market by seamlessly meeting our customers and partners online, virtually or in person," Scannell and Byrne wrote in their memo.
