Dell To Carry Out 'Continued' Job Cuts Through End Of Year

'Throughout Fiscal 2025, we remain committed to disciplined cost management … We anticipate these actions will result in a continued reduction in our overall headcount,” the company stated in a quarterly business filing with the SEC.

Layoffs at Dell Technologies are expected to be an ongoing part of business with more cuts expected before the end of the year as it seeks more “disciplined cost management” to prepare for the future.

The Round Rock, Texas-based tech giant stated in a regulatory filing that in the first half of this fiscal year ended Aug. 2, it had paid severance costs of $400 million. It said that dollar figure is identical to the workforce reduction costs it paid during the entire previous year when it eliminated 13,000 jobs during two layoff announcements in February 2023 and August 2023.

“Throughout Fiscal 2025, we remain committed to disciplined cost management in coordination with our ongoing business transformation initiatives and will continue to take certain measures to reduce costs, including limitation of external hiring, employee reorganizations, and other actions to align our investments with our strategic priorities and customer needs,” the company stated in a 10-Q filing this week. “We anticipate these actions will result in a continued reduction in our overall headcount.”

Dell’s position as a leader in selling the high-end servers needed to carry out generative AI workloads has resulted in a booming business for its most valuable compute stack.

Dell is making the cuts while telegraphing to investors that revenue will grow 10 percent by the end of the year to as high as $98.5 billion.

Much of that revenue growth will come through its Infrastructure Solutions Group (ISG) division, which sells high-end server and storage products to enterprises and hyperscalers globally. Dell expects revenue to end the year growing 30 percent.

The company has already touted massive nine-digit server deals with ServiceNow, and Michael Dell, company founder, chairman and CEO, took to LinkedIn to show the crates of Dell servers that would power Grok for xAI, the AI startup founded by Elon Musk. Dell forecasts PC sales in its client devices will be flat.

However in May, Wall Street balked at the non-existent margins Dell achieved on those sales. At the time, Dell Chief Operating Officer Jeff Clarke said its competitors were driving the costs of winning deals up, but Dell was willing to take less per sale for the attached spend down the road.

Wall Street did not like what it heard on the call.

Over the next two months Dell lost $65.15 billion in value – about a billion per day – as its market cap plummeted by more than 50 percent from $127.32 billion on May 29 to $62.17 billion on August 7.

That week Dell announced layoffs along with a reorganization of its workforce around AI. During its most recent earnings call at the end of August, Clarke touted the company’s improved margins achieved through cost discipline. The company’s share price has risen since, clawing its way back above $100.

Yesterday afternoon Dell traded at $108 with a market cap of $77 billion, a recovery of about $15 billion in value.

Dell has not stated how many jobs it has cut so far this year. In response to a CRN question on Wednesday about employee figures, Dell said it would provide a headcount update in its next annual report due in early 2025.

“Through a reorganization of our go-to-market teams and an ongoing series of actions, we are becoming a leaner company. We are combining teams and prioritizing where we invest across the company,” Dell Technologies told CRN in response to a question about the ongoing layoffs. “We continually evolve our business so we’re set up to deliver the best innovation, value and service to our customers and partners.”

Dell has been aiming cuts at its own sales force as it relies more on channel partners to drive revenue to its market-leading infrastructure and PC products. Last year – simultaneous with thousands of sales jobs cut -- Dell introduced Partner First For Storage, which gives Dell’s own sellers more cash to close storage deals via a channel partner.

With the new go-to-market strategy, Dell’s direct sellers are calling in Dell reseller partners when it’s time to expand deals, renew deals and win new storage deals.

As the leader in market share globally for external RAID, high-end RAID, mid-range RAID, converged storage, HCI storage, purpose-built back-up appliance, and all-flash array RAID storage – according to July data from IDC – it is a massive book of business into which Dell is welcoming partners.

Partners have told CRN they recommend any Dell salesperson hit by layoffs to begin the hunt for a new job among Dell’s channel partners.