 "Dell to fire 12,500 employees because of AI, plans to pivot into a ‘leaner’ organisation")
Dell Technologies is undergoing significant changes, cutting some sales positions while creating others, as part of its effort to reorganise for the AI era.
The company aims to become leaner and more growth-focused through this process. On Monday, Dell stated that it is reorganising its go-to-market teams and prioritising investments to enhance innovation, value, and service for its customers and partners.
Impact of layoffs and financial performance
The company did not disclose the exact number of employees affected by the latest layoffs. However, Dell has previously reduced its workforce by 13,000 jobs in two rounds last year, bringing its total headcount down from 133,000 to about 120,000.
The Round Rock, Texas-based tech giant reported annual sales of $88.4 billion for the 2024 fiscal year, a 14 per cent decline from the previous year and $13.5 billion less than its record $101.9 billion in 2022.
Dell’s second round of layoffs last year coincided with the introduction of the “Partner First For Storage” initiative, which incentivises core sellers to route storage deals through the channel. CEO Michael Dell and other leaders have praised this move as a way to strengthen relationships with channel partners.
The layoffs have led to various reactions within the industry. Gary McConnell, CEO of Dell Platinum partner VirtuIT Systems, sees the layoffs as a sign of Dell’s increased reliance on channel partners.
McConnell encourages those affected by the layoffs to seek opportunities within the channel. He believes the restructuring demonstrates Dell’s commitment to working more closely with partners, despite the uncertainty that accompanies such changes.
Impact Shorts
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Bob Venero, CEO of Future Tech, views the cutbacks as Dell’s strategy to leverage AI for increased productivity. He believes that relying more on the channel will benefit Dell as the company focuses on innovative products and solutions. Venero emphasized Dell’s exponential growth in channel presence over the past two decades and its continued strength in the market.
Denise Millard, Dell’s Chief Partner Officer, discussed the reorganization’s benefits for the company and its partners. She noted that Dell is streamlining various departments to promote better collaboration and capitalize on a $2 trillion-plus market opportunity. Millard highlighted the substantial changes brought by GenAI and the evolving technology landscape, emphasizing the importance of partners in unlocking value for modern IT and AI.
Overall, Dell Technologies’ restructuring aims to position the company for success in the AI era by becoming leaner and more focused on growth, while continuing to strengthen its relationships with channel partners.
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