Classic manufacturers of northern equipment and PCs, in the face of changing market conditions, have to constantly adjust their organizational structure; dismissed employees often become victims of such processes. In the case of Dell, which last month announced the reduction of 12,500 people, optimization in this area will continue until February next year.
Image source: Dell
This is how long Dell Technologies’ current fiscal year will last, as Bloomberg explains. The company is forced to reduce staff numbers because demand in the PC market is not picking up, and sales of server equipment for artificial intelligence systems do not generate income in the expected volumes. The fact is that the corresponding server systems require expensive components produced by Nvidia, and Dell itself is earning less and less on such products. Profits in this case may increase as such, but increased costs worsen the company’s profitability.
In the PC segment, Dell is heavily dependent on the enterprise market. In general, demand for finished computers has remained quite low over the past two years. Last quarter, Dell reduced revenue by 4% to $12.4 billion, and while PC sales in the corporate sector brought it a comparable amount to last year, revenue in the consumer segment decreased by 22%. The company announced its intentions to continue cutting costs in the current fiscal year in a filing with US regulators this week. In February, Dell had about 120,000 employees worldwide, and in the summer it announced plans to lay off about 12,500 of them. Apparently, staff reductions will not be limited to these values.