In the second week of August 2024, it was reported that Dell aimed to simplify operations and integrate AI, and therefore, had initiated a significant internal restructuring. The overhaul reportedly included a reorganisation of the sales division and streamlining of management, accompanied by workforce reductions that some employees feared could be the largest in Dell’s history. Now, with the sale of personal computers (PCs) going slow, Dell Technologies expects to continue cutting jobs this year in a bid to reduce costs.
The company had hoped that the sale of PCs would pick up, but the same was less than expected after two years of poor sales. Its servers optimised for artificial intelligence or AI are yet to bring in profits. After all, these servers require expensive computer chips manufactured by companies such as Nvidia Corp. Also, this is a relatively new business of Dell, which is otherwise known for PCs and other products.
With a control on hiring, in addition to reorganisation of jobs and other actions, the workforce strength at Dell is bound to reduce by the end of this financial year, that is, by February of 2025.
With expansion of the unit that makes high-powered servers for AI becoming the focus, investors are showing renewed interest in Dell, though.
The company posted revenue of $12.4 billion in the second quarter, which is four per cent less than the period last year.
Consumer-oriented PCs also didn’t sell as expected, reporting a dip of 22 per cent from a year earlier.
All this has forced Dell to adopt measures to manage costs in line with the transformations the business is undergoing.
