Dell announces plans to cut about 5% of its workforce

Dell Technologies announced plans to reduce its workforce by approximately 5% on 6 February, alongside a reorganisation aimed at aligning investment with its strategic and customer priorities.

Photo: Eustress, “Dell RR1” (23 May 2010). CC BY-SA 3.0. Resized and cropped, also CC BY-SA 3.0.

In a message to employees, Jeff Clarke said market conditions continued to deteriorate. Dell had already paused external hiring, limited travel and cut spending on outside services, but he said those measures weren’t enough.

The changes span sales, support and engineering. Regional sales and Dell Technologies Select teams will report to one leader, with support functions following a similar structure. Dell also plans to integrate support services into its Infrastructure Solutions Group and Client Solutions Group, bringing customer feedback and service costs closer to product and engineering decisions.

The businesses entering that reorganisation have different recent records. In results released on 21 November for the quarter ended 28 October, Client Solutions revenue fell 17% to US$13.8 billion. Infrastructure Solutions revenue rose 12% to US$9.6 billion. The combined servers and networking category grew, as did storage.

Taken together, those results and the employee memo show that support integration reaches both a shrinking division and a growing one. Clarke’s stated rationale includes bringing service-cost responsibility closer to engineering and product design. The announcement doesn’t disclose how job losses will be distributed between those businesses.

Dell expects expenses tied to the measures to be reflected in its fiscal 2023 fourth-quarter results. The filing doesn’t give a charge amount or an exact number of jobs affected.