Dell Announces Continued Job Cuts Amid Margin Pressures

Dell To Carry Out 'Continued' Job Cuts Through End Of Year

'Throughout Fiscal 2025, we remain committed to disciplined cost management ... We anticipate these actions will result in a continued reduction in our overall headcount," the company stated in a quarterly business filing with the SEC. Layoffs at Dell Technologies are expected to be an ongoing part of business with more cuts expected before the end of the year as it seeks more "disciplined cost management" to prepare for the future. The Round Rock, Texas-based tech giant stated in a regulatory filing that in the first half of this fiscal year ended Aug. 2, it had paid severance costs of $400 million. It said that dollar figure is identical to the workforce reduction costs it paid during the entire previous year when it eliminated 13,000 jobs during two layoff announcements in February 2023 and August 2023. "Throughout Fiscal 2025, we remain committed to disciplined cost management in coordination with our ongoing business transformation initiatives and will continue to take certain measures to reduce costs, including limitation of external hiring, employee reorganizations, and other actions to align our investments with our strategic priorities and customer needs," the company stated in a 10-Q filing this week. "We anticipate these actions will result in a continued reduction in our overall headcount." [RELATED: Dell Technologies Infrastructure Sales Hit Record, AI Server Revenue Surges 80 Percent] Dell's position as a leader in selling the high-end servers needed to carry out generative AI workloads has resulted in a booming business for its most valuable compute stack. Dell is making the cuts while telegraphing to investors that revenue will grow 10 percent by the end of the year to as high as $98.5 billion. Much of that revenue growth will come through its Infrastructure Solutions Group (ISG) division, which sells high-end server and storage products to enterprises and hyperscalers globally. Dell expects revenue to end the year growing 30 percent. The company has already touted massive nine-digit server deals with ServiceNow, and Michael Dell, company founder, chairman and CEO, took to LinkedIn to show the crates of Dell servers that would power Grok for xAI, the AI startup founded by Elon Musk. Dell forecasts PC sales in its client devices will be flat. However in May, Wall Street balked at the non-existent margins Dell achieved on those sales. At the time, Dell Chief Operating Officer Jeff Clarke said its competitors were driving the costs of winning deals up, but Dell was willing to take less per sale for the attached spend down the road. Wall Street did not like what it heard on the call. Over the next two months Dell lost $65.15 billion in value - about a billion per day - as its market cap plummeted by more than 50 percent from $127.32 billion on May 29 to $62.17 billion on August 7. That week Dell announced layoffs along with a reorganization of its workforce around AI. During its most recent earnings call at the end of August, Clarke touted the company's improved margins achieved through cost discipline. The company's share price has risen since, clawing its way back above $100. Yesterday afternoon Dell traded at $108 with a market cap of $77 billion, a recovery of about $15 billion in value. Dell has not stated how many jobs it has cut so far this year. In response to a CRN question on Wednesday about employee figures, Dell said it would provide a headcount update in its next annual report due in early 2025. "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," Dell Technologies told CRN in response to a question about the ongoing layoffs. "We continually evolve our business so we're set up to deliver the best innovation, value and service to our customers and partners." Dell has been aiming cuts at its own sales force as it relies more on channel partners to drive revenue to its market-leading infrastructure and PC products. Last year - simultaneous with thousands of sales jobs cut -- Dell introduced Partner First For Storage, which gives Dell's own sellers more cash to close storage deals via a channel partner. With the new go-to-market strategy, Dell's direct sellers are calling in Dell reseller partners when it's time to expand deals, renew deals and win new storage deals. As the leader in market share globally for external RAID, high-end RAID, mid-range RAID, converged storage, HCI storage, purpose-built back-up appliance, and all-flash array RAID storage - according to July data from IDC - it is a massive book of business into which Dell is welcoming partners. Partners have told CRN they recommend any Dell salesperson hit by layoffs to begin the hunt for a new job among Dell's channel partners.

Dell Says Job Cuts Will Continue With Margins Under Pressure

(Bloomberg) -- Dell Technologies Inc. will continue to reduce its workforce this year, trying to control costs amid concerns that demand for PCs hasn't rebounded and sales of servers optimized for artificial intelligence aren't as profitable as other products. Dell said a limitation on outside hiring, job reorganizations and other actions will produce "continued reduction in our overall headcount" in the fiscal year ending in February 2025. The company is focused on expanding the business of selling high-powered servers for artificial intelligence work. This new spigot of growth has excited investors -- the stock has gained 39% this year through Tuesday's close and will join the S&P 500 Index later this month. Still, there is increasing concern about the profitability of the equipment sold by Dell and peers such as Super Micro Computer Inc. and Hewlett Packard Enterprise Co. because the servers need expensive computer chips made by companies like Nvidia Corp. In the most recent quarter, Dell said that a higher mix of AI servers hurt margins, but reported improved profit compared with the previous period. The company's better-known business, the sale of personal computers, hasn't picked up as much as anticipated after a two-year slump. Dell on Aug. 30 reported $12.4 billion in fiscal second-quarter revenue, down 4% from the same period a year earlier and slightly missing estimates. Sales of business PCs was little changed while revenue from consumer-oriented PCs declined 22% from a year earlier. "We remain committed to disciplined cost management in coordination with our ongoing business transformation initiatives and will continue to take certain measures to reduce costs," Dell said Tuesday in a regulatory filing. The company declined to comment beyond the filing. In June, Dell cut jobs primarily in sales without disclosing how many workers would be affected. The company took a $328 million charge for severance expenses in the quarter. Dell said in February that it had about 120,000 full-time workers globally.

Dell says even more job cuts could come soon

Dell has confirmed plans to continue headcount reductions into the rest of its financial year as it continues to battle with dwindling PC sales and a revised business plan. A report from Bloomberg claims the company confirmed it would action "continued reduction in our overall headcount" via hiring limitations, internal restructuring and other actions. Efforts to boost margins come several months after the company mounted pressure on hybrid workers to return to the office in a bid to boost productivity. The news comes after several impactful rounds of layoffs carried out at the company, including 6,600 workers at the beginning of 2023 and a further 6,000 workers at the start of 2024. A few months later, reports started to circulate that Dell was considering lying off another 12,000 workers - a number that was not proven. Known for its consumer and business PCs, Dell has been one of many affected by poor PC sales in the years following the pandemic. According to Canalys figures for the three months ending June 30 2024, Dell's market share dropped by 2.4% to 16%, positioning it in third place behind HP and Lenovo. While global PC shipments showed signs of recovery in the back half of 2023, sales dropped into 2024 and annual growth rates have almost flatlined. Windows 10's upcoming ended support will likely cause a temporary boost to sales, but Dell is leaning more on trends in artificial intelligence, where it hopes its high-end servers will boost revenue. In its most recent quarter, the company managed to boost revenue by 9% to $25.0 billion, despite its Client Solutions Group business - the one responsible for laptops and desktops - reporting a 4% drop in revenue to $12.4 billion. Dell said: "We remain committed to disciplined cost management in coordination with our ongoing business transformation initiatives and will continue to take certain measures to reduce costs." TechRadar Pro has asked the company for more information regarding its plans to reduce its workforce, but we did not receive a response.

Dell Says Job Cuts Will Continue With Margins Under Pressure

Dell Technologies Inc. will continue to reduce its workforce this year, trying to control costs amid concerns that demand for PCs hasn't rebounded and sales of servers optimized for artificial intelligence aren't as profitable as other products. Dell said a limitation on outside hiring, job reorganizations and other actions will produce "continued reduction in our overall headcount" in the fiscal year ending in February 2025.

Dell announces further layoff plans in SEC filing

Dell reported a smashing quarter, and employees should be prepared for what that means: Layoffs. In its latest 10-Q filing with the US Securities and Exchange Commission, published in the wake of its fiscal Q2 2025 earnings report, the systems maker admitted that those sparkling sales numbers don't change the fact that AI means "business transformation" will continue. "We remain committed to disciplined cost management in coordination with our ongoing business transformation initiatives and will continue to take certain measures to reduce costs, including limitation of external hiring, employee reorganizations, and other actions to align our investments with our strategic priorities and customer needs," Dell said in its SEC filing. "We continue to advance our own capabilities ... by leveraging new technology and optimizing business processes," it added. "We anticipate these actions will result in a continued reduction in our overall headcount." In early August, Dell confirmed plans to lay off employees - possibly as many as 12,500 people - and told us it was becoming a leaner company by reorganizing its go-to-market team and undertaking "an ongoing series of actions," without specifying what those were. In line with its recent tone in the Q2 earnings call and the 10-Q, Dell attributed last month's layoffs to streamlining operations with AI. When asked for details about workforce reduction plans mentioned in the SEC filing, which is worded to imply it's forthcoming, Dell responded with the same quote it gave us confirming its layoffs in early August. Dell employees posting on anonymous workplace site The Layoff have mentioned ongoing job cuts at company offices outside the United States, and plans to notify staff stateside about the future of their roles in the coming weeks. Dell didn't answer any questions about numbers for any potential future workforce reductions, and hasn't confirmed the number it cut in early August, either. Estimates put it at around 12,500 people, or about ten percent of its workforce. Those wide-scale cuts are beginning to look like an annual tradition at Dell, which last year shed roughly 13,000 workers after pledging smaller reductions. The company is not alone, with other tech giants also chopping headcount last year and this, including Microsoft, Google and more. AI is predicted to have broad effects on the workforce, both in and outside of the tech industry. A recent survey of business executives found that 41 percent of surveyed biz executives expect AI to lead to reductions in their workforce, and only half said they'd reassign these affected workers.®

Dell's job cuts aren't over yet

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. Dell has been cutting jobs since February 2023 and looking to cut costs as demand for its PCs slows. Meanwhile, advancements in AI have been identified as an area of growth that it's eager to focus on. In August, it announced it would lay off thousands of workers as part of a restructuring of its sales division to adapt to an AI world. An internal memo sent to members of the sales team at the time said that an AI-specific sales unit was being set up and that modernization would free up time for sales teams to focus on selling. But Dell staff said they thought there would be many more terminations. "There are no opportunities to move up," one Dell salesperson previously told Business Insider, "I have been looking for a new job outside of Dell for nine months." Dell did not immediately respond to a request for comment from Business Insider.

Tech layoffs: Dell 'issues' another job cuts warning, here's what company said - Times of India

Dell has reportedly announced plans to reduce its workforce further this year to control costs. The PC maker cited concerns over stagnant demand for PCs and the relatively lower profitability of servers optimised for artificial intelligence (AI) compared to its other products to announce its cost cutting measures which may very well include a fresh round of layoffs. According to a report by Bloomberg, Dell also noted that restrictions on external hiring, job reorganisations, and other measures will lead to a "continued reduction in our overall headcount" for the fiscal year ending in February 2025. In June, the company reduced its workforce, mainly in the sales department. However, it didn't specify the number of employees that were affected. Due to these layoffs, Dell had to pay $328 million in severance costs during that quarter. In February, the company reportedly had nearly 120,000 full-time employees worldwide. What Dell said about layoffs "We remain committed to disciplined cost management in coordination with our ongoing business transformation initiatives and will continue to take certain measures to reduce costs," Dell said in a regulatory filing seen by Bloomberg. Dell's concern behind announcing the job cuts warning As per the report, Dell is focusing on expanding its business of selling high-powered servers designed for AI tasks. This new growth area has also reportedly excited investors as the company's stock has increased by 39%. However, Dell is concerned about the profitability of equipment sold by the company and its rivals like Super Micro Computer (SMC) and Hewlett Packard Enterprise (HPE), as these AI servers require expensive computer chips from companies like Nvidia. Dell claimed that a higher proportion of AI server sales impacted margins in the most recent quarter, even though overall profit improved compared to the previous period, the report noted Meanwhile, the company's more established PC business has not rebounded as strongly as expected following a two-year slump. Last month, the company reported $12.4 billion in fiscal second-quarter revenue, which was down 4% from the same period a year ago as well as slightly below estimates. Even though sales of business PCs remained steady, the revenue from consumer PCs dropped by 22% year-over-year. The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.

Dell sees continued reduction in overall headcount

Dell Technologies (NYSE:DELL) said it anticipates in a continued reduction in overall headcount throughout fiscal 2025, as the company takes measures to reduce costs, including limitation of external hiring among others. The IT giant on Thursday said it expects fiscal 2025 revenue to be between $95.5B and $98.5B, with the mid-point of $96B slightly below the $96.37B estimate. Filing More on Dell Technologies Dell: Excellent Earnings - Remains A Strong Buy Dell: Blockbuster AI Growth, Don't Worry About Margins Dell: An Opportunity In The Wake Of PC And Server Downturn AMD, Dell, Oracle listed as top tech picks by UBS into year-end Dell initiated with Neutral rating at Susquehanna