Dell made a significant number of layoffs public on Tuesday, August 6, in an effort to transition to AI-related goods and services. Approximately 10% of the workforce is expected to be impacted by the most recent wave of layoffs.
Although the precise number of workers who will be most negatively impacted by the current move made by the US computer giant has not been made public, estimates place the figure at 12,500. Long-standing employees as well as the company’s sales teams will be significantly impacted by the restructure.
The IT giant confirmed this change in an email to The Register, saying that this reorganization is resulting in it “becoming a leaner company”.
In an effort to improve innovation, value, and customer service, the corporation claims that part of their restructuring include combining teams and giving investments top priority.
Dell’s President of Global Sales and Customer Operations Bill Scannell and President of Global Channels John Byrne talked about “streamlining layers of management” in an internal memo to staff members.
They highlighted Dell’s goal of using “the value of modern IT and AI” for customer companies to outperform market growth.
Several sources state that managers and senior managers—some of whom have worked for the company for more than 20 years—will be the main victims of these layoffs.
Speaking anonymously, an employee informed Business Insider (BI) that “mostly managers, directors, and vice presidents were involved.” They also targeted operations and marketing. In addition to merging organizations, they increased the managers’ ratio. These days, every manager oversees at least 15 workers, according to BI.
According to reports, the majority of the laid-off employees would receive a severance package that includes two months’ worth of pay plus an extra week for every year of service, up to a maximum of 26 weeks.
Possible partial bonus payouts could also be included in the severance deal. Nonetheless, the loss of stock options and long-term incentives as a result of this procedure has angered several long-term employees.
Dell is confident about its future despite numerous rounds of layoffs and criticism from former workers, especially given its increased emphasis on artificial intelligence.
Additionally, Dell hopes that improvements will be fueled by a new generation of AI-optimized PCs.
In their message, Scannell and Byrne stated, “We aim to grow faster than the market by seamlessly meeting our customers and partners online, virtually, or in person.”
