Dell is undergoing significant restructuring aimed at focusing more on AI-based products and servers, leading to substantial job cuts.
An internal memo by sales executives John Byrne and Bill Scannell, viewed by Bloomberg, highlighted these changes. Multiple publications later confirmed the memo through Dell’s public relations. A representative told The Register that Dell’s go-to-market teams are being reworked, with investments prioritized across the company.
Job Cuts Impact Thousands
Although Dell has not specified the number of employees affected, estimates suggest around 12,500 jobs will be cut. Most of these cuts appear to impact the sales division. Severance packages are expected to include:
- Two months’ worth of pay
- One extra week of pay per year of service, up to 26 weeks
- Additional partial bonus payouts might also be provided
However, there are reports of long-term employees losing stock options and other incentives.
This move by Dell mirrors broader trends in the tech industry, with other giants like Intel also making significant workforce reductions.
Last week, Intel announced it would cut 15 percent of its workforce, approximately 16,000 employees, as part of efforts to reduce operating expenses and capital expenditures. Intel CFO David Zinsner described these reductions as proactive measures to enhance profitability and strengthen the balance sheet. However, investor reaction has been negative, with Intel shares dropping more than 35 percent since the announcement.
For Dell, the shift towards AI and server products marks a departure from its traditional focus on personal computers. Despite this strategic pivot, the market reaction has been unfavorable, with Dell shares down nearly six percent in one day and over 21 percent in the past five days amid a global selloff.
Featured Image courtesy of Justin Sullivan/Getty Images
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