Dell Reports stated that it meant to cut further jobs this year in order to achieve cost savings. Believing the sales of PCs have reached a plateau, and disappointed by the low margins AI server products generate, the PC vendor had to announce rounds of cost cuts which would most probably include more Layoffs.
As reported by Bloomberg, Dell also pointed out that external recruitment bans, job changes and similar factors will “will lead to further cut in headcount” within the current financial period ending February 2025.
In June, the company carried out staff reduction for employees in particular their sales department. But the company did not mention how many people were affect. Because of these layoffs, Dell had to spend $328 million during the quarter in severance packages so that due to this restructuring fell under the terms imposed by the company for September. It had previously been reported that the company employed a total of around 120,000 staff members on the broad level.
Dell lay off news
“We express our intention to keep up with strict expense discipline as per the Cost Reduction programmes targeting on the on-going transformation of businesses as well as concentrating on specific steps that will lead to cost reduction.” Dell said in regulatory documents accessed by Bloomberg.
Concerns behind Dell’s layoff warning
As stated in the article, Dell is looking towards increasing its market stake in sales of specialized servers developed for AI. This new area of growth also reportedly excited investors, increasing the share price of the company by 39%.
Yet, when considering super micro computer (SMC) and his friends, or Hp enterprises, what happens in general, dell and the like will be super micro in response to the company, such ones like SMC and HPE. since AI servers need to come from companies like NVIDIA.
The report pointed out that although the overall profits showed some improvement as compared to the previous period, Dell indicated that there were lower profits due to a higher proportion of artificial intelligence server sales in the most recent quarter.
At the same time, the company’s more mature PC business has failed to recover as strongly as anticipated following two years of downturn. Last month, the company indicated that its revenue for the fiscal second quarter amounted to $12.4 billion, or 4% below the revenue obtained a year ago, and slightly lower than the market expectations. While revenues in commercial PC sales remained unchanged, revenues in consumer PC sales decreased by 22% as compared to the same period last year.
