Dell slashes 12,500 jobs in bold AI shift: reports
US technology group Dell has announced its latest round of layoffs in a bid to streamline sales and marketing efforts and sharpen its focus on AI products and services. This marks the company’s second wave of mass layoffs in a span of 15 months.
Dell senior executives Bill Scannell and John Byrne notified staff about the job cuts and reorganisation plans in a memo: “We are getting leaner. We’re streamlining layers of management and reprioritising where we invest.”
Scannell and Byrne highlighted the company’s goal of moving fast in the AI arms race and creating greater value for customers through modern IT and AI solutions.
Dell told media outlets that it is in the process of reshuffling its go-to-market teams and combining teams following a shift in investment priorities. “We continually evolve our business so we’re set up to deliver the best innovation, value and service to our customers and partners,” Dell said in a statement.
The two rounds of job cuts at Dell brings the total number of laid-off workers to 24,500, PCMag reported.
Read More: Layoffs continue – Dell axes 7,000 roles
HR scrambling to offboard laid-off Dell employees
The sudden wave of job cuts has left Dell’s HR team scrambling to conduct hundreds of exit interviews, which began on Tuesday morning.
This shift in priorities entails redirecting sources to a new AI-focused division. Meanwhile, the company is reportedly letting go of as many as 12,500 employees, or about 10% of its global workforce, including seasoned team members, sources familiar with the matter said.
The number is a rough estimate of roles likely to be affected but is yet to be confirmed. Other reports, meanwhile, suggest a more drastic approach of shaving down the company’s 120,000-strong workforce to somewhere around 100,000.
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Given the estimated number of roles to be terminated, HR staff members were said to have been so overwhelmed by the sheer volume of interviews that many were unable to conduct the 1:1s later on.
In terms of employees’ exit packages, industry observers believe terminated staff will be given two months’ worth of pay plus the equivalent of a week’s wages for every year of service, capped at 26 weeks. Company veterans, however, expressed dismay over the likelihood of losing their stock options and long-term incentives.
Those who survived this round of job cuts aren’t resting easy either. Considering the frequency of layoffs, some doubt the most recent cuts would be the last.
Read More: Laid-off tech workers find new job within 3 months
Return-to-office mandates as indirect job cuts
Dell isn’t content with terminating employees outright, observers pointed out. The ultimatum given early this year – which required remote workers to return to the office, at least on a part-time basis, or risk losing career advancement opportunities – was deemed by many as an indirect way of cutting staff.
At the time, the tech company warned those who refused to return onsite that their remote status would be considered a factor “when planning for organisation changes” such as workforce reductions, The Register reported.
The layoffs at Dell come on the heels of Intel’s own retrenchment effort. Last week, Intel shed 15,000 jobs to “align [its] cost structure” and “fundamentally change the way [it] operates”.