With an aim to simplify operations and integrate AI, Dell has initiated a significant internal restructuring this week. The overhaul includes a reorganisation of the sales division and streamlining of management, accompanied by workforce reductions that some employees fear could be the largest in Dell’s history.
In an internal memo, Dell executives outlined the company’s commitment to becoming a leaner organisation through these changes. The restructuring has led to a slowdown in work as employees anxiously await news of potential layoffs, with some describing the atmosphere as tense and morale at a low point.
The layoffs coincide with Dell’s rollout of a new AI strategy, which has been in development since October 2023.
The strategy involves the application of AI across various functions, including product development, content management, sales tools and customer service. The goal is to increase efficiency and allow employees to focus on more critical tasks. However, the adoption of AI is also expected to render certain roles redundant, particularly those involving repetitive tasks.
As the AI strategy takes hold, some employees expressed understanding of the layoffs, acknowledging that the nature of work is changing. However, the reduction in workforce has raised concerns about the impact on team dynamics and the ability of managers to effectively oversee multiple products.
The restructuring and workforce reductions are seen by many as a pragmatic business decision, particularly given Dell’s reliance on external sales channels and the consolidation of product teams. Despite this, the scale of the layoffs has raised eyebrows, with internal data suggesting that tens of thousands of employees could be affected, potentially bringing Dell’s workforce strength below 1,00,000.
