Updated: Dell reduces its global workforce by 13,000 jobs
Enterprise technology company Dell Technologies Inc. revealed in a filing today that it has slashed its workforce by about 13,000 employees, as part of a broader cost-cutting initiative that also included putting limits on external hiring.
According to Reuters, Dell’s global workforce stood at approximately 120,000 employees as of Feb 2, 2024, down from about 133,000 one year earlier. But the filing revealed that Dell had cut more than expected, totaling 13,000. According to CRN, Dell had revealed the number for the February 2023 job cuts, which totaled 6,000. But it had not responded to requests about the number of jobs cut in another round in August.
The layoffs followed a particularly tough period for the company, which has been hampered by almost two years of sluggish demand for personal computers. In its most recent earnings call last month, the company revealed that its revenue had dropped 11% from the same period a year ago.
Fortunately for Dell, the layoffs appear to have had the desired impact, as the company is forecasting net revenue in its client solutions group, which includes PCs, to grow in its fiscal 2025 year. Sales within that segment had fallen 12% in the fourth quarter, and although the company is still cautious about near-term challenges, it’s optimistic that fiscal 2025 will usher in a more competitive demand and pricing environment.
The company is cautiously optimistic that better times are just around the corner. Last month it said it has high hopes for its artificial intelligence-enabled PCs and computer servers. It noted that orders for AI-optimized servers rose 40% sequentially compared to the previous quarter. The strength of that business belies the conventional wisdom that most AI training will happen in the cloud. “We are optimistic about 2025 and expect a return to growth above our long-term framework,” Dell Chief Operating Officer Jeff Clarke said on a conference call.
That said, Dell also expects its input costs to increase, and warned that there will still be revenue declines in other segments of its business because of what it said is the change in its commercial relationship with VMware Inc., the virtualization software company that was recently offloaded to Broadcom Inc.
Dell had bought back shares tied to its interest in VMware in 2018, paving the way for it to return to the public markets. However, it decided to cash in on the software maker last year, selling it to Broadcom for $69 billion.
Last year, Dell cut about 6,650 jobs, saying at the time that the layoffs were necessary to counter a potential recession and ongoing weakness in the PC market.
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