Dell to Lay Off Sales Staff as It Reorganizes with New AI-Focused Unit

Photo : Reuters

In early 2023, Dell Technologies Inc. announced a substantial workforce reduction, cutting 13,000 jobs during that fiscal year. The company has now revealed another round of job cuts as part of a significant reorganization within its sales teams. This restructuring will introduce a new division dedicated to artificial intelligence (AI) products and services.

Bill Scannell and John Byrne, sales executives at Dell, informed employees in a memo that the company is "getting leaner" by streamlining management layers and reallocating investment priorities. The new AI-focused unit will be a key part of this strategic shift, alongside changes in the approach to data center sales.

Dell, based in Texas, has seen a resurgence of investor interest due to its advanced servers capable of handling AI workloads. Despite this, there is growing concern about the long-term returns on AI investments, which often require costly servers and graphics processing units. A company spokesperson did not specify how many jobs would be impacted by the latest restructuring but emphasized that the moves are aimed at creating a leaner organization.

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Dell's shares have risen 34% this year as of the end of the last trading week, although the stock has since retraced more than 40% from its peak of $179.21 on May 29. As of February, Dell employed approximately 120,000 people globally, according to a regulatory filing.

While Dell’s core personal computer business has faced challenges due to a post-pandemic slump, there are signs of recovery in the computer industry. The company remains hopeful that a new generation of AI-optimized PCs will drive future upgrades and growth.

In their memo, Dell’s executives expressed their commitment to growing faster than the market by engaging with customers and partners through various channels, aiming to unlock the potential of modern IT and AI solutions for their organizations.

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