Dell lays off sales team staffers as it eyes AI sales

Dell Technologies is reportedly laying off thousands of staffers from its sales team.

The layoffs are part of the hardware vendor’s reorganization efforts targeted at increasing its revenue from AI-related sales by putting in a new sales unit focused on AI products, according to a Bloomberg report.

“We are getting leaner,” sales executives Bill Scannell and John Byrne were quoted as saying in an internal memo to Dell employees.

 “We’re streamlining layers of management and reprioritizing where we invest,” the executives explained, adding that the company would be changing its approach towards data center sales.

In an emailed statement to Computerworld, Dell said, “Through a reorganization of our go-to-market teams and an ongoing series of actions, we are becoming a leaner company. We are combining teams and prioritizing 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.”

In March of this year, the company revealed in a filing that it was continuing to execute cost management measures, such as workforce reductions, limiting external hiring, and employee reorganizations, as it tried to navigate issues related to the ongoing macroeconomic environment.

The layoffs in March resulted in a reduction of the company’s overall headcount. After their completion, the employee count stood at approximately 120,000, declining from the 133,000 recorded in February 2023.

A repeat of last year

During the first week of February last year, the company laid off 6,650 workers, about 5% of its total workforce, due to declining PC sales and infrastructure requirements.

The company had already tried to cut costs by pausing hiring and limiting travel before taking the decision to downsize its workforce, Co-Chief Operating Officer Jeff Clarke shared in a blog post at the time.

In addition to the downsizing, Clarke said the company would introduce a slew of changes that include changing the structure of its sales team and integrating the services division of its consumer and infrastructure businesses.

“We have further opportunity to drive efficiency through department reorganizations, which has resulted in a reduction of team members across the globe,” a company spokesperson said in an email after the 2023 layoffs.

Tech industry layoffs continue

Dell Technologies is not the only company that has had to lay off staffers this year, especially in its sales team, to maintain business operations.

In January, Google, in an extension to the restructuring strategy it planned last year to maintain investor confidence and adjust to market conditions, laid off a few hundred staffers from its advertising sales team and started relying on machine learning to automate advertising.

After two years of massive layoffs at IT companies, 2024 was expected to be a year of recovery for the industry. While there are early signs of that, with global IT spending expected to increase 8% to cross $5.1 trillion in 2024 according to Gartner, jobs continue to be impacted in the sector.

So far in 2024, 387 tech companies globally have laid 126,032 employees, according to job reduction tracker website layoffs.fyi.

Those companies include the likes of Intel, Cisco, Microsoft, SAP, and Docusign.