Tech layoffs: Dell fires 12,500 employees, or 10 per cent of global workforce, in major shift towards AI, says report

Computer giant Dell has announced a major reorganisation of its sales division, resulting in layoffs as part of a strategy to modernise operations and focus on artificial intelligence. The company informed employees of these changes in an internal memo on August 6, outlining plans to centralise sales teams and create a new AI-focused sales unit, as per a report by Business Insider.

The precise number of employees affected has not been officially confirmed, but it is estimated that approximately 12,500 individuals, or about 10% of Dell's workforce, have been impacted, as per a Newsbyte report.

The memo, titled "Global Sales Modernization Update," was sent by senior executives Bill Scannell and John Byrne. It detailed the company's intentions to streamline management layers and reprioritise investments. The executives wrote, “We are getting leaner. We're streamlining layers of management and reprioritizing where we invest,” as quoted by BI.

Livemint could not independently verify this news development.

While the exact number of job cuts was not disclosed, multiple employees from the sales division reported being laid off or knowing colleagues who were affected. According to these sources, the layoffs primarily impacted managers and senior managers, some with over two decades of experience at the company, as per BI.

One employee, speaking anonymously, told Business Insider, “It was mostly managers, directors and VPs. They also hit marketing and operations. They combined organizations and also made the ratio higher for the managers. Now every manager has a minimum of 15 employees,” as quoted by BI.

Another sales worker expressed frustration with the situation, stating, “Several managers that have been here for a long time got let go. It just kind of shows you it doesn't matter how much effort you put into this job. As soon as it helps their bottom line, you're gone,” as quoted by BI.

These layoffs are part of a larger trend at Dell, which has reduced its workforce from 130,000 to approximately 120,000 since February 2023. Some employees report a sense of job insecurity and limited growth opportunities within the company.

"Every six months we have layoffs," one employee said. “There are no opportunities to move up. I have been looking for a new job outside of Dell for nine months,” the employee told BI.

A Dell representative confirmed to Business Insider that the company is undergoing an "ongoing series of actions" to streamline operations. However, the company emphasised the potential benefits of these changes, with Scannell and Byrne concluding in their memo, "The destination is going to be worth it — it's about winning and winning big!"

As Dell continues its restructuring efforts, employees and industry observers alike will be watching closely to see how these changes impact the company's performance and position in the rapidly evolving tech landscape.