Dell Technologies Layoffs: 'Nothing Routine About Today's Environment'Dell Technologies Layoffs: 'Nothing Routine About Today's Environment'
With the cuts, Dell says it is focusing on the long-term health of the company.
September 15, 2020
Dell Technologies layoffs are coming. In a move to address its cost structure in uncertain times, the vendor notified employees that it will eliminate jobs, Bloomberg first reported.
An unnamed source said that Jeff Clarke, chief operating officer at Dell, told staff at an internal quarterly meeting that planned layoffs are coming. There was no mention of which groups or employees the cuts will impact. The vendor employs 165,000 people worldwide.
Dell’s Jeff Clarke
“We’re also evaluating our business to make sure we have the right number of team members in the right roles and in areas where customers need us most,” according to a statement by a Dell spokesperson.
Dell Technologies responded to an inquiry by Channel Futures about the layoffs:
“Our priority continues to be taking care of our team members, so we can take care of our customers and our business, to ensure they’re healthy and strong for the long term,” the statement reads. “We’re also evaluating our business to make sure we have the right number of team members in the right roles and in areas where customers need us most. And, we’re addressing our cost structure to make sure we’re as competitive as we should be now and for future opportunities. While we do this type of organizational review regularly, and while it always results in some job loss or restructuring, we recognize that there is nothing routine about today’s environment. We updated our team Monday with this information so they understand the actions occurring this week. Every decision we’ve made up to this point is to make sure we’re doing what’s best for the long-term health of our company and our team.”
In a quarterly earnings call on Aug. 27, the company reported revenue of $22.8 billion. That was down 3% from the previous quarter. Operating income was $2.6 billion, or 11.5% of revenue.
Infrastructure solutions revenue was $8.2 billion, down 5%. Breaking that down, server and networking revenue was $4.2 billion, down 5%; and storage revenue was $4 billion, down 4%. Client Solutions Group commercial revenue was down 5%. The Client Services Group consumer revenue was $3.16 billion, up 18%. VMware revenue was $2.9 billion, up 10%.
During the call, Clarke said that Dell expects 60% of its workforce to stay remote or have a hybrid schedule. That’s in response to the fluid and uncertain economic times in which we live.
Yesterday, Clarke rolled out remote working plans to employees, worldwide, according to Bloomberg. Dell is letting employees work from home as much as they would like. That’s from one to five days a week post-pandemic, as long as they have manager approval. The vendor isn’t making compensation adjustments. And, the company was providing remote employees $400 for home office equipment.
Dell’s Tom Sweet
Tom Sweet, chief financial officer at Dell, in the financial call, addressed the outlook for the remainder of the year. He noted that it remained uncertain.
“Similar to Q2, we expect Q3 revenue to be seasonally lower than prior years, which has typically been flat to down 2% sequentially,” Sweet said.
Also at Dell
Also mentioned on Dell’s earnings call was the continued focus to provide as-a-service solutions for customers across the company’s portfolio.
“Giving them [customers] more flexibility in cloud-like economics,” said Sweet.
And, the fate of the Dell-VMware relationship is not yet sealed.
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