Dell Technologies Inc. is laying off an unspecified number of employees in a reorganization of sales and marketing teams, according to sources.
According to Bloomberg today, the reorganization includes a new group focused on artificial intelligence services.
One source close to the matter told SiliconANGLE that 12,500 layoffs are planned across the company starting Tuesday, but the number could not be confirmed. That would be about 10% of Dell’s worldwide workforce of about 120,000. Another source suggested the cuts could be much larger.
Dell declined to provide specifics on the layoff. “Through a reorganization of our go-to-market teams and an ongoing series of actions, we are becoming a leaner company,” the company said in an email to SiliconANGLE. “We are combining teams and prioritizing where we invest across the company. We continually evolve our business so we’re set up to deliver the best innovation, value and service to our customers and partners.”
In an internal memo, Bill Scannell, president of global sales and operations, and John Byrne, president of sales for Global Theaters and Dell Technologies Direct, reportedly told employees, “We are getting leaner. We’re streamlining layers of management and reprioritizing where we invest.”
Rumors of layoffs were swirling today on TheLayoff.com website. “Despite whatever person from corporate put in here earlier about this being a 1% layoff, it is in fact larger than that and is hitting services, sales, marketing & engineers,” one person said. “Half of my team is gone in marketing and still no coms.”
Dell has been cutting staff for at least the past year. It laid off a total of 13,000 last year, according to CRN, including 6,000 in February 2023 and another round in August whose numbers the company didn’t specify.
In its most recent quarter, Dell disappointed investors. Shares plunged almost 18% on May 31, the day after results were reported, as analysts raised concerns about the impact of rising demand for artificial intelligence servers on the company’s overall profitability. Dell officials said they expected the company’s gross margin to fall by roughly 150 basis points in fiscal 2025 as a result of the increased mix of AI servers, inflationary input costs and a more competitive environment.
The layoffs follow a 15% reduction announced by Intel last week, affecting 15,000 workers. Intel’s stock plunged 26% on Friday, the day after the chipmaker reported disappointing earnings and outlook.
Chief Executive Michael Dell stopped by theCUBE, SiliconANGLE Media’s mobile livestreaming event studio, during its coverage of the Dell Technologies World event in May, when he discussed how his company is leading the AI revolution: