Dell Technologies has taken decisive steps to streamline its operations, including workforce reductions, as part of a cost-cutting strategy outlined in a filing released on Monday.
As of February 2, 2024, Dell’s workforce numbered nearly 120,000 employees, reflecting a decrease from approximately 126,000 individuals employed a year prior. These layoffs coincide with a broader initiative aimed at cost reduction, which encompasses measures such as curbing external hiring and implementing employee reorganizations.
The company’s decision to downsize the number of employees follows a prolonged period of sluggish demand for its personal computers, which has persisted for nearly two years and contributed to an 11 percent decline in revenue reported in last month’s fourth-quarter earnings.
Dell Technologies, in its earnings report in March, has reported annual revenue of $88.4 billion (down 14 percent) with operating income of $5.2 billion (down 10 percent).
“We’ve just started to touch the AI opportunities ahead of us, and Dell is uniquely positioned with our broad portfolio to help customers build GenAI solutions that meet performance, cost and security requirements,” Jeff Clarke, vice chairman and chief operating officer, Dell Technologies, said in March.
Despite the challenges faced, Dell remains optimistic about the prospects of its client solutions group (CSG), the division responsible for PCs. It anticipates net revenue growth within CSG for the entirety of the fiscal year, even though the segment experienced a 12 percent revenue decrease in the fourth quarter, Reuters news report said.
Looking ahead, Dell foresees improvements in demand and a more competitive pricing landscape in fiscal year 2025. However, the company acknowledges the likelihood of rising input costs and anticipates a “continued reduction of our other businesses’ net revenue” due to changes in its commercial relationship with VMware.
Dell’s ties to VMware have undergone shifts, notably with the buyback of shares associated with its interest in the software maker, a move that facilitated Dell’s return to the market in 2018. The landscape further evolved with chipmaker Broadcom’s completion of its $69 billion acquisition of VMware last year.
Last year, Dell initiated significant job cuts totaling 6,650 positions, as it prepared for potential economic downturns and confronted diminishing demand for personal computers.
Baburajan Kizhakedath
