Dell Announces Job Cuts as Part of AI-Focused Restructuring

Dell is cutting staff as it pivots to AI. A company exec says it will make jobs easier and more fulfilling.

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. While it's been using "classic" AI in products such as the Dell Optimizer for more than a decade, the company recently introduced a series of AI-enhanced products and partnered with Nvidia to build an AI factory for Elon Musk's xAI. However, Dell considers itself "customer zero," Mohindra said, meaning getting its own approach to AI right was critical. In June 2023, management moved to determine the best way to implement AI across the business, with a plan refined by October followed by testing to ensure value from the new tools. They are now being rolled out. "The question has been how can our unique operating model work much better with these AI tools," Mohindra said. "The pace at which we need to think of our products and offers needs to increase significantly." Dell is applying AI to four core areas: product development (specifically software coding), content management, sales tools, and customer service. Mohindra broke down how individual workers' day-to-day jobs would change, starting with the example of a Dell developer. "When you're coding, you have the ability to have an assistant that can help you do the first revision of the code, or debugging. That frees up the developer to focus more on the higher value-added layers of it, in terms of thinking about the architecture, and it increases the actual amount of time they spend coding," he said. Pointing to external research, he said that for a specific coding task, AI can increase productivity by 20% to 40%. Dell's targets for teams' output aligned with those levels. On the customer service side, Dell hops that AI will help its staff solve customers' problems more quickly. "Through some of these tools, the customer service agents will have the customer's information handy at their fingertips," Mohindra said. "Similarly, on content management, we are a large company with a large product portfolio," he continued. AI tools will give sales teams the ability to quickly compile the material needed to have conversations with customers. This month Dell announced a significant restructuring of its sales division to drive growth and support its transition into the AI era that includes significant layoffs. "The destination is going to be worth it -- it's about winning and winning big!" executives wrote in an internal memo to staff. "What we've seen in all of these technology transitions, certain roles become less important, but other aspects of the roles become really, really important," Mohindra said when asked about the potential for workforce reductions in connection with Dell's AI strategy. "60% of the jobs that exist today did not exist in 1940, and 85% of new roles right now didn't, literally because of technology development and technology changes," he said. He said the focus was now on upskilling Dell staff to help them use AI tools: "It'll require continual re-skilling and learning, but I'm very optimistic that it'll actually make people's jobs easier and much more fulfilling as and when they embrace these technologies." Workers are excited by the flexibility AI could give them and had embraced the new strategy, Mohindra said. "The receptivity has been very positive because it is just making our team members much more effective at their jobs," he said. One Dell team leader in sales told BI that internal systems badly needed updating and that they were looking forward to being able to create PowerPoint presentations with AI. Dell had held training sessions on AI fundamentals, the person said, requesting to remain anonymous as they were not permitted to speak to the press. "But other than that, it's a shitshow," they added. "Every single meeting has the word AI in it, and it's just mind-numbingly repetitive. The use cases for AI right now are incredibly limited. It's definitely a buzzword that we're trying to make money off."

Dell makes a harsh move, solidifying fears about the future of work

Dell (DELL) just made a major cost-cutting move that confirms a major fear that is starting to haunt a lot of employees across the nation. As a growing number of companies are experimenting with using artificial intelligence to improve productivity in the workplace, many employees have been concerned that the technology will pose a threat to their jobs. Related: Dell workers ignore return-to-office mandate According to a recent survey from CNBC and SurveyMonkey, 42% of U.S. workers are concerned about the impact AI will have on their jobs. For Dell employees, this nightmare has just become a reality as the tech company just revealed that it is boosting its investment in AI, and as a result, its workplace has just become "leaner." An estimated 12,500 Dell employees, who worked in the sales division, have been laid off from their jobs on Aug. 5 as the company is planning to invest in a new group that will focus on AI products and services. "We are getting leaner. We're streamlining layers of management and reprioritizing where we invest," said Dell sales executives Bill Scannell and John Byrne in a memo to employees, according to a recent Bloomberg report. The executives also claimed in the memo that the company is aiming to quickly boost its growth by unlocking "the value of modern IT and AI." The last time Dell conducted layoffs was in 2023 when it shrunk its headcount by 13,000 people in an effort to reduce costs. Dell appears to be doing well financially since last year's layoffs. In its most recent earnings report, the tech company revealed that its net revenue increased by 6% year-over-year. Its net income also skyrocketed by 65%, boosting it to $955 million, compared to the $578 million it reported during the same quarter in 2023. More Labor: "We again demonstrated our ability to execute and deliver strong cash flow, with AI continuing to drive new growth," said Dell Chief Financial Officer Yvonne McGill in the earnings report. Dell's battle with workers over return-to-office mandate The recent layoffs from Dell comes amid a rebellious tug-of-war the company is having with its employees over its return-to-office mandate, which requires employees to work from the office three days a week. About half of Dell's employees have reportedly opted to ignore the company's strict return-to-office policy, as many of them have chosen to instead continue working from home full time, without fearing the consequences. This even comes after Dell allegedly rolled out a color-coded system in May that tracked employees through their badge swipes and VPN connections to ensure that they are working from company offices. Related: Veteran fund manager picks favorite stocks for 2024

Tech layoffs: Dell cuts more jobs this department, to focus on AI - Times of India

Tech giant Dell Technologies has announced another round of job cuts as part of its strategic shift towards an AI-centric future. As reported by Bloomberg, the company is streamlining its operations to become "leaner" and more agile in the face of rapid technological advancements. While Dell has not disclosed specific figures, this latest reduction in workforce follows significant layoffs in 2023 that saw the company shed over 13,000 jobs.The company is aiming to optimise its resources and invest heavily in AI research and development. The decision was communicated to employees in an internal memo by executives Bill Scannell and John Byrne. This layoff has impacted the employees in the sales and marketing department. "Through a reorganization of our go-to-market teams and an ongoing series of actions, we are becoming a leaner company," a spokesperson told Bloomberg. Dell's core PC business has faced challenges in recent years following a surge in demand during the pandemic. However, with the PC market showing signs of recovery, the company is hopeful that AI-powered devices will drive a new wave of upgrades. "We aim to grow faster than the market by seamlessly meeting our customers and partners online, virtually, or in person, to unlock the value of modern IT and AI for their organizations," the Dell executives wrote in the memo to employees. Dell slashed its workforce by 13,000 employees in 2023. The tech giant revealed this figure in a recent regulatory filing, which also stated that the company employed approximately 120,000 people globally as of February. 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.