Tech layoffs: Dell to lay off 12,500 employees, or 10% of global workforce, amid major shift to AI, report says

Computer giant Dell has announced a major reorganization of its business division, leading to layoffs as part of a strategy to modernize its operations and focus on artificial intelligenceThe company informed employees of the changes in an internal memo on August 6, outlining its plans to centralize sales teams and create a new AI-driven sales unit, according to a report from Business Insider.

The exact number of employees affected has not been officially confirmed, but it is estimated that around 12,500 people, or around 10% of the population, are affected. Dell Employees were affected, according to a report from Newsbyte.

The memo, titled “Global Sales Modernization Update,” was sent by senior executives Bill Scannell and John Byrne. It details the company’s intentions to streamline management layers and reprioritize investments. “We are leaning out. We are streamlining management layers and reprioritizing investments,” the executives wrote, as BI reports.

Livemint could not independently verify this report.

While the exact number of job cuts was not disclosed, several employees in the business unit said they had been laid off or knew of colleagues who had been affected. The layoffs, according to the sources, mainly affected executives and managers, some with more than two decades of experience at the company, BI reported.

An employee, speaking on condition of anonymity, told Business Insider: “It was mostly managers, directors, and VPs. They also touched marketing and operations. They merged the organizations and also increased the ratio for managers. Now each manager has at least 15 employees,” as BI put it.

Another salesperson expressed frustration with the situation, saying, “Several managers who had been there for a long time were let go. It just goes to show that it doesn’t matter how much effort you put into this job. As soon as it helps their bottom line, you’re gone,” as BI put it.

These layoffs are part of a broader trend Dellwhich has reduced its workforce from 130,000 to around 120,000 people since February 2023. Some employees report a feeling of job insecurity and limited opportunities for advancement within the company.

“Every six months we lay off people,” one employee said. “There is no opportunity for career advancement. I have been looking for a new job outside of Dell for nine months,” he told BI.

A Dell representative confirmed to Business Insider that the company is implementing a “continuing series of actions” to streamline its operations. However, the company highlighted the potential benefits of these changes, with Scannell and Byrne concluding in their note: “The destination will be worth it, it’s about winning and winning big!”

As Dell continues its restructuring efforts, employees and industry observers will be closely watching how these changes impact the company’s performance and position in a rapidly changing technology landscape.