Dell started a massive internal reorganization this week. Dell executives told employees in an internal memo that the goal is to simplify how they operate and rethink work and customer experiences with AI.
The sales division was reorganized and management was simplified as part of the modifications. Dell also began a wave of labor reductions that, according to some employees, might be the biggest in the company’s history and would last the entire quarter.
A Dell representative stated, they are becoming a leaner company through a reorganization of their go-to-market teams and an ongoing series of actions.
Ten employees from throughout the organization spoke about how they perceive the changes. Everyone asked not to be named because employees are not permitted to speak to the media.
One sales support staffer noted how work had slowed all week as employees checked their inboxes for meeting invitations.
The employee stated that this had a negative impact on morale in the short term. He wouldn’t be surprised if it ends up in the dumpster until the next Tell Dell or the third-quarter earnings report.
“We’re burning the boats,’ is the analogy being used,” another person added, characterizing the circumstances as “a bit of a dumpster fire.”
AI strategy
With the introduction of Dell’s new AI strategy, there are layoffs.
Since October 2023, Dell has been testing AI tools internally. As part of this goal, AI is now being applied to many areas such as customer care, sales tools, content management, and product development.
Corporate strategy SVP Vivek Mohindra told that the tools will increase employee productivity and free up time for more crucial work.
Jobs involving more routine and repetitive work are predicted to become obsolete as AI becomes more widely used in the workplace. Twelve million people would need to make a complete career transition by 2030, according to McKinsey. Employees stated that the strategy’s initiation of layoffs was not surprising.
One fired sales employee, who has lost over 60 team members, stated, It’s a new quarter, and they’re working on getting all support AI-focused. He would rather not quit than be let go with a package, the individual continued.
Although layoffs were difficult, a number of Dell employees acknowledged that artificial intelligence was altering the nature of employment.
According to a worker, it makes sense just from a commercial standpoint. They also mentioned that several tasks entailed little more than sending statements of work to another section.
The employee clarified that in order to make sellers more independent and to expedite the present problem-solving procedures, there is a desire to significantly reduce this particular workforce and replace them with AI solutions.
Another mentioned how AI servers were becoming more and more expensive, and suggested that cutting employees was one way for businesses to recover their expenses.
Getting leaner
Many employees thought that the reorganization and layoffs were normal business decisions, in addition to the effects of automation and artificial intelligence.
The majority of it makes sense, according to one senior engineer: They are depending more heavily on external sales channels that have deeper relationships with customers, thereby cutting back on sales and marketing.
According to the engineer, some roles were no longer required due to the convergence of various storage product teams. The drawback of the reorganization was that team managers now had to handle several products rather than just one.
Less than 100,000 workers will be employed at Dell after layoffs, two human resources employees told. Tens of thousands of workers are being let go since the company, according to internal statistics in May, had just under 120,000 full-time employees.
According to a Dell spokesman, no numbers related to the reorganization that were shared with their internal team were reported or verified.
According to an HR staffer, the goal was motivated by a Bain mantra that states that a firm must employ 100,000 people in order to be valued at $100 billion. The employee stated that they were aware that Dell had collaborated with Bain consultants on a number of initiatives dating back to 2021.
More to come
In late May, Dell’s stock was selling at over $180, but since then, it has dropped to roughly $91, valuing the business at just over $64 billion.
Dell like to operate lean, according to three employees from other departments.
A sales support worker stated that “everyone usually mentions this as an ongoing legacy. Any time we exceed 100,000 employees, we should expect some labor reductions.”
The worker took that as a sign that there would be further layoffs: Let’s face it: the entire quarter is going to be terrible.
