Tech layoffs continue: Dell to slash 12.5K jobs in restructuring for AI era

Dell executives Bill Scannell and John Byrne communicated the layoffs through an internal memo, titled "Global Sales Modernisation Update", on August 6

In its latest round of layoffs, US-based computer maker Dell has announced the termination of around 12,500 employees. Last year, Dell also eliminated 13,000 jobs in two rounds of cuts.

In a statement released on Monday afternoon, the company said it is cutting some sales jobs (while adding a few other positions) to "reorganise its business for the AI era, become leaner, and focus on growth". The layoffs primarily impacted managers and senior managers, some with over two decades of experience at the company, according to media reports.

Dell executives communicated the layoffs through an internal memo on August 6. The memo, titled "Global Sales Modernisation Update", was sent by senior executives Bill Scannell and John Byrne. It outlined the Texas-based company's intentions to "streamline management layers and reprioritise investments".

"Through a reorganisation of our go-to-market teams and an ongoing series of actions, we are becoming a leaner company. 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," it said.

Justifying its restructuring efforts, the company added, "The destination is going to be worth it -- it's about winning and winning big!"

As of February, Dell employed around 120,000 people globally. It is worth mentioning that Dell's core PC business has faced challenges following a surge in demand during the pandemic. However, despite these challenges, the company is hopeful that AI-powered devices will drive new growth.

Tech layoffs touching new high

Intel also recently announced its plan to cut 15,000 jobs this year, continuing a pattern of significant job reductions that began last year. Chief Executive Officer Pat Gelsinger attributed these cuts to "disappointing revenue growth" and difficulties in effectively leveraging AI trends.

Similarly, Microsoft reduced its workforce by around 1,000 employees in the mixed reality and Azure ‘moonshots’ divisions. Additionally, UKG, a software firm headquartered in Massachusetts, announced significant job cuts this month, reducing its workforce by 14 per cent, which equates to about 2,200 employees.

Other companies, including Intuit, Dyson, and Kaspersky, have also announced layoffs. Indian companies are following the global trend, with Unacademy, WayCool, and PocketFM announcing job cuts this year.