Dell Technologies has announced a significant restructuring initiative, leading to the dismissal of approximately 12,500 employees, representing about 10% of its workforce. This decision marks the company’s second round of layoffs within the past 15 months.
The reduction in workforce is part of a strategic move to streamline operations and reallocate resources towards Artificial Intelligence (AI) and modern IT solutions. The company aims to leverage AI to unlock new value for customer organizations and stay ahead in a competitive market. Bill Scannell, President of Global Sales and Customer Operations, and John Byrne, Global Channels President, communicated this decision through an internal memo, emphasizing the need to “streamline layers of management” and outlining the painful yet necessary steps for future growth.
Affected employees will receive severance packages, including two months’ wages plus an additional week per year of service, capped at 26 weeks. Despite these provisions, there has been notable discontent among long-term employees regarding the loss of incentives and stock options. Recent budget cuts and cancelled projects had already hinted at potential reductions.
This latest round of layoffs follows a reduction of around 13,000 employees in the 2023 fiscal year. The company’s recent decision to end remote work policies further aligns with its strategy to manage workforce size. With these changes, Dell’s workforce is expected to fall below 100,000.
