Dell has initiated another round of layoffs, affecting a significant number of employees, including long-term company veterans. HR exit meetings began on Tuesday morning, leading to numerous LinkedIn status updates and discussions in online forums as affected employees sought support and shared information.
Dell confirmed the layoffs in an email to The Register, explaining that the company is reorganizing its go-to-market teams and taking ongoing actions to become leaner. The reorganization aims to combine teams and prioritize investments to deliver better innovation, value, and service to customers and partners. This sentiment was echoed in a memo from Bill Scannell, president of global sales and customer operations, and John Byrne, global channels president, who mentioned “streamlining layers of management.”
The layoffs, estimated to affect around 12,500 employees or about ten percent of the workforce, are part of Dell’s strategy to reduce its overall headcount from 120,000 to below 100,000. However, it remains unclear if this target has been met or if more layoffs are expected, as some suspiciously scheduled 1:1 meetings were reportedly moved. Due to the high volume of layoffs, Dell’s HR department was allegedly overwhelmed, leaving line managers to handle some terminations.
Severance packages are expected to include two months’ wages plus a week per year of service, up to a maximum of 26 weeks, along with potential partial bonus payouts. Long-term employees have expressed frustration over losing long-term incentives and stock options. Some employees anticipated the layoffs due to recent budget cuts in advertising and the withdrawal of major requests for proposals from companies like Intel.
Dell employees have experienced frequent layoffs, often referred to as the yearly “rank and yank.” Last year, Dell announced a reduction of around five percent of its workforce but ultimately cut 13,000 employees. Additionally, Dell’s return-to-office mandate, after previously promoting remote and hybrid work, was seen by many as a stealth layoff, particularly affecting women.
These layoffs come shortly after Intel announced it would cut 15 percent of its payroll to manage its finances amid missing the AI market and facing increased competition in the PC space. Dell’s stock was down three percent during afternoon trading on Monday, reflecting broader market trends.
The layoffs may also indicate a shift in Dell’s strategy towards engaging more with partners and less with in-house sales, marking a total shift for the company that built its brand on direct sales. Many of the eliminated positions were from the sales division, aligning with Dell’s Partner First For Storage initiative announced last August, aimed at boosting sales through the channel.
