In a filing released today, major enterprise technology Dell Technologies Inc. said that, as part of a larger cost-cutting drive that also included placing restrictions on external hiring, the business had reduced its staff by over 6,000 employees.
As of 2 February, 2024, Dell employed about 120,000 people worldwide, down from over 126,000 a year earlier, according to Reuters. Following a challenging time for the business due to nearly two years of weak demand for personal computers, there were layoffs. The company disclosed during its most recent results conference last month that its revenue had decreased by 11% from the same time the previous year.
Fortunately for Dell, it looks like the layoffs had the desired effect because, in its fiscal year 2025, the company expects net revenue in its client solutions group—which includes PCs—to increase. The company is hopeful that fiscal 2025 will bring in a more competitive demand and pricing environment, despite the fact that sales within that segment had dropped 12% in the fourth quarter.
The business has a cautious optimism that better times are on the horizon. It had great expectations for its AI-enabled PCs and computer servers last month. According to the report, orders for AI-optimized servers increased by 40% sequentially over the prior quarter. The company’s robustness refutes the belief that most AI training will take place in the cloud. During a conference call, Dell Chief Operating Officer Jeff Clarke stated, “We are optimistic about 2025 and expect a return to growth above our long-term framework.”
That being said, Dell mentioned that it will still experience revenue declines in other business segments due to the shift in its commercial relationship with VMware Inc., the virtualization software company that Broadcom Inc. recently acquired. Dell also anticipates an increase in its input costs.
In 2018, Dell repurchased shares associated with its ownership of VMware, clearing the path for its reintroduction to the public markets. But last year, it decided to cash in on the software provider and sold it to Broadcom for $69 billion.
Dell eliminated about 6,650 jobs last year. At the time, the company claimed that the layoffs were required to combat a possible recession and persistent weakness in the PC market.
