Dell fires 12500 employees in bold restructuring Why? To fuel AI ambitions

• “AI will not take away your job, rather it will create more jobs.” I am sure you have heard this line from many business heads in the past 2 years.
• After MSN, Google, Intel, and Salesforce announced mass layoffs there is going to be another one, this time at Dell, to shift their focus on “AI”.
• Here is the breakdown.

Dell layoffs due to AI advancements

In a rapidly changing tech world, Dell is making a significant pivot to Artificial Intelligence (AI) as the cornerstone of its future growth.

But…there’s a less glamorous side to this—layoffs.

As Dell doubles down on AI, roles that involve more mundane and repetitive work are expected to become redundant.

Senior executives Bill Scannell and John Byrne mentioned in a memo, “We are getting leaner. We’re streamlining layers of management and reprioritizing where we invest.”

Which division is getting impacted? 

The decision was communicated to employees on 6th August. An internal memo outlined plans to centralize sales teams and establish a new AI-focused unit.

Marketing and operations teams were also affected.

Though the exact number of affected employees has not been officially confirmed, estimates suggest around 12,500 people, roughly 10% of Dell’s workforce, may have been impacted.

Also read: Reliance layoffs 11% of its workforce, totaling 42,000 employees

Roles that are getting the pink slip

The layoffs have had a significant impact, particularly on long-serving employees.

The cuts mainly affected,

• Managers
• Directors
• Vice Presidents

Reports indicate that some managers and senior managers with decades of experience were also affected.

How will they get compensated?

Affected employees are said to be receiving severance packages that include two months’ wages along with an extra week of pay for each year of service.

Reduced workforce throughout the company

Two Dell HR representatives told Business Insider that the layoffs will trim the workforce from 120,000 full-time employees as of May to under 100,000.

Upskilling its workforce in AI

Despite the turmoil, there’s an undercurrent of optimism at Dell.

The company’s corporate strategy SVP Vivek Mohindra, told Business Insider that Dell is focused on upskilling its staff to embrace these new AI tools, promising that, jobs will not only become easier but also more rewarding in the long run.

Also read: Layoff frenzy at Citigroup: CFO Mark Mason announced 20,000 job cuts globally. Here’s what you need to know

About Dell

Dell Inc., based in Round Rock, Texas, is an American multinational technology company that was established in 1984.

The company’s product portfolio includes personal computers, servers, monitors, computer software, and security solutions, covering both network and information security services.

Number of employees: 1,20,000 (2024)

Revenue: 77.92 billion USD as of August 2024

Leadership

Chairman & CEO – Michael Dell

CFO – Yvonne McGill

Vice Chairman and COO – Jeff Clarke

CTO – John Roese

CHRO – Jennifer Saavedra

CMO – Geraldine Tunnell

The word “AI” seems to be everywhere these days. With Reliance Industries firing 42k employees, as well as Intel laying off 15k, do you think AI will take away more jobs?