Tech layoffs continue, Dell fires 12,500 employees to streamline for AI era
Dell's layoff plans were laid out in a memo, which said the tech company wants to "reorganise its business for the AI era, become leaner, and focus on growth"
US-based technology company Dell has fired 12,500 employees, or nearly 10 per cent of its global workforce as it moves to streamline operations in a major shift towards artificial intelligence. Last year, the company had laid off 13,000 employees in two rounds of cuts.
The layoffs are largely in the sales division of the company. According to report in business dailies, the employees were told of these changes in an internal memo on August 6, outlining plans to centralise sales teams and create a new AI-focused sales unit.
The memo said the Texas company plans to "reorganise its business for the AI era, become leaner, and focus on growth".
There is no official confirmation of the number of people who have been laid off but news reports estimated that approximately 12,500 individuals, or about 10 per cent of Dell’s workforce, have been impacted.
'We are getting leaner'
The memo, which was headlined "Global Sales Modernization Update," detailed the company's intentions to streamline “management layers and reprioritise investments”.
“We are getting leaner. We're streamlining layers of management and reprioritizing where we invest,” said the memo, according to reports. Managers and senior managerial employees, some with over two decades of experience at the company, have been laid off.
Many employees were frustrated that several managers who had been with the company for a long time have been let go just to ensure the company's bottom-line.
Job insecurity
Since February 2023, Dell has drastically cut its workforce from 130,000 to approximately 120,000. There is a sense of job insecurity among employees, who are only seeing limited growth opportunities within the company.
With layoff every six months, employees feel there are no opportunities to move up. Dell’s ongoing streamlining of its operations have created ripples in the rapidly evolving tech industry.
The memo, however ended on a gung-ho note stating: "The destination is going to be worth it, it's about winning and winning big!"
Experts say that Dell is hopeful that AI-powered devices will drive new growth.
However, Intel and Microsoft too went in for job cuts. Intel is planning to cut 15,000 jobs again this year continuing the pattern from last year. These cuts have been blamed on "disappointing revenue growth" and difficulties in effectively leveraging AI trends. Intuit, Dyson, and Kaspersky, have also announced job cuts.
