Dell cuts jobs, restructures to become 'a leaner company' for AI era
"We are combining teams and prioritising where we invest across the company. We continually evolve our business, so we’re set up to deliver the best innovation, value and service to our customers and partners"
Dell Technologies is cutting some sales jobs and adding others, as it reorganises its business for the AI era, to become "leaner" and focused on growth.
"Through a reorganisation of our go-to-market teams and an ongoing series of actions, we are becoming a leaner company," the company said in a statement released Monday afternoon.
"We are combining teams and prioritising where we invest across the company. We continually evolve our business, so we're set up to deliver the best innovation, value and service to our customers and partners."
The company is not releasing the number of employees it is cutting in this most recent round of layoffs. Last year, Dell eliminated 13,000 jobs in two rounds of cuts. The company's total headcount fell from 133,000 to about 120,000.
The Round Rock, Texas-based technology giant's annual sales came in at $88.4bn for the 2024 fiscal year, off 14 per cent from a year before and $13.5bn less than its record $101.9bn haul in 2022. Dell's most recent fiscal year ended Feb 2, 2024.
The second round of layoffs last year coincided with a new go-to-market announcement, called Partner First For Storage, which it debuted in August.
The move incentivises Dell's own core sellers to move storage deals through the channel. CEO Michael Dell and other leaders inside the company have praised the shift as a way to form closer relationships with channel partners.
Gary McConnell, CEO of Dell Platinum partner VirtuIT Systems, told CRN on Monday that he views Dell Technologies' layoffs as a sign the company is engaging more with partners. He also is encouraging those cut to look to the channel for jobs.
"We're reading this as Dell leadership truly committing to leaning on their channel partners more; they've added incentives and are now reorganising resources," he said. "There's uncertainty whenever restructuring happens, but we're hopeful that those impacted will land in the channel and help us continue to drive customer value through Dell."
Axed staff respond
Those who were affected by the layoffs took to social media to report about the job cuts.
A 15-year Dell veteran in the role of new seller experience and engagement coordinator, assisting new sellers in the ramp-up process, posted on LinkedIn on Monday that she was looking for a new position due to a recent layoff. "It has been a remarkable journey filled with growth, learning, and unforgettable experiences," said the Dell veteran.
A nearly six-year Dell veteran in the role of federal sales coach providing training to Dell Federal Sales reps in the channel and distribution said she was also laid off in a post on LinkedIn
"I was impacted by a work force reduction," said the Dell veteran in a LinkedIn post. "While I am devastated to leave the people I coach, train, work with and know there, I am looking for a new role and would appreciate your support."
C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company and a Dell Titanium partner, said that Dell Technologies has long signaled its intent to become a leaner company that will rely more heavily on channel partners.
"We are seeing stronger Dell channel engagement in all areas of the business from commercial to enterprise to new logo acquisition," said Howdyshell. "Dell's channel commitment is stronger than ever even with this restructuring. This is part of a bigger picture Dell has laid out to reduce its headcount."
Advizex, in fact, has seen a marked increase in both Dell Apex consumption-based deals and AI-based deals. "More and more customers are looking to spread out their costs with multiyear opex deals," said Howdyshell. "We have seen a significant uptick in Apex opportunities. It's more important than ever that we provide an option for a single bill, pay-as-you-go, consumption-based service for every deal."
Advizex recently closed a five-year, $20m-plus Apex deal that effectively makes Dell and Advizex the strategic cloud provider for the customer, said Howdyshell. "That deal is a total Apex solution that includes Cisco and Equinix with Advizex services and managed services," he said.
Howdyshell complimented Dell Channel chief and SVP of North American channel sales Gregg Ambulos for providing strong channel partner engagement and leadership. "Gregg has stood out as a channel leader at critical times for Dell," said Howdyshell.
Bob Venero, president and CEO of Future Tech said he sees the cutbacks as part of a no holds effort by Dell to leverage the power of AI to increase productivity.
"Dell is rightsizing by leveraging AI and its own technologies to become a leaner company," he said. "From my perspective this is only going to benefit the channel as Dell relies more heavily on the channel to drive sales of their innovative products and solutions.
"We see Dell continuing to double down on the channel. Dell has grown its channel presence exponentially over the last two decades. As the Dell portfolio continues to get stronger, more and more partners are leading with Dell from the desktop to the datacentre to the cloud."
Dell's chief partner officer Denise Millard spoke with CRN on Monday about how a reorganisation of the 40-year-old company will benefit the firm and partners as they seek to capitalise on what she said is a $2tn-plus market opportunity.
"As we have grown over the years, we have had various organisations that needed to be brought together to promote better and faster collaboration," Millard told CRN.
"We have different selling organisations sitting in different areas. Pockets of marketing. Pockets of services. What we have done as part of what's happening starting today is we are streamlining all of that."
Millard said in this case, Dell is recognising that genAI is making some substantial changes to the world and the way that technology environments all operate.
"I think it's pretty well known that the way that people buy, and this new generation of buyers are much more informed," she said. "They're looking to do business with partners who can help them unlock the value to modern IT and AI."