Dell To Focus On AI-driven Sales; Initiate Job Cuts
Some reports suggest that Dell will lay off 12,500 employees
Dell Technologies will be undertaking a series of job cuts as part of a major reorganisation of its sales teams. This move will include the creation of a new group dedicated to artificial intelligence (AI) products and services, as per a Bloomberg report.
In a memo to employees, sales executives Bill Scannell and John Byrne detailed the company's plans to streamline management layers and reprioritise investments. He said, “We are getting leaner.” Additionally, Dell will alter its approach to data center sales, capitalising on its high-powered servers designed for AI workloads.
The Texas-based hardware technology giant has seen a resurgence of investor interest over the past year, driven by its advanced servers capable of handling AI tasks. Despite this, there are growing concerns about the timeframe required for companies to realise returns on their substantial AI investments, which often involve expensive servers or graphics processing units.
While Dell declined to specify the number of jobs affected, the company aims to become leaner through the reorganisation of its go-to-market teams and other ongoing actions.
Dell's stock has experienced a 34 per cent increase this year, although it has dropped more than 40 per cent from its peak of USD 179.21 on 29 May. This latest workforce reduction follows a significant cut in early 2023 when Dell shed 13,000 jobs. As of February, the company reported having approximately 1,20,000 full-time employees globally.
The company’s traditional business of selling personal computers has struggled in recent years due to a post-pandemic decline in the PC market. However, industry shipments are beginning to recover, and Dell is hopeful that a new generation of AI-optimised PCs will drive future upgrades.
In their memo, the executives expressed optimism about growth, stating their aim to outpace the market by effectively engaging with customers and partners across various platforms to unlock the value of modern IT and AI for their organisations.
(Inputs from Bloomberg)
