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Our reporter Wu Qing reports from Beijing

On August 6, according to people familiar with the matter, global PC giant Dell Technologies is reorganizing its sales and marketing teams and plans to lay off a large number of employees.

Sources close to the matter told SiliconANGLE that Dell plans to lay off 12,500 employees starting August 6, but the news and figures have not yet been confirmed. According to Bloomberg, the restructuring plan also includes the establishment of a new team focused on artificial intelligence services.

Regarding the relevant news and Dell's layout in the Chinese market, the reporter of China Business News contacted Dell through various means such as phone and online consultation, but no reply was received as of press time. However, the reporter noticed that Dell had already started to lay off employees last year. If the above layoff news is true, it will account for about 10% of Dell's approximately 120,000 employees worldwide. Another source said that the scale of layoffs may be even larger.

Layoffs in progress

Although there is no official confirmation, there are reports of restructuring within Dell.

Dell declined to provide specific details of the layoffs, but the company said in an internal email: "We are becoming leaner through the reorganization of our market teams and a series of ongoing actions. We are merging teams and prioritizing investment areas across the company. We continue to evolve our business to provide the best innovation, value and services to our customers and partners."

In an internal memo, Bill Scannell, Dell's president of global sales and operations, and John Byrne, president of global regions and Dell Technologies direct sales, told employees: "We are becoming leaner. We are simplifying layers of management and refocusing our investments."

Recently, rumors about Dell layoffs have been rife on TheLayoff.com. A person familiar with the matter said: "The layoffs are actually larger, affecting services, sales, marketing and engineers. Half of my marketing team has left, and there is still no communication."

Dell has been laying off employees for at least the past year. Dell said in an announcement in late March 2024 that as of February 2, 2024, the company had 120,000 employees worldwide, down nearly 10% from the previous year. That is to say, in the natural year of 2023, Dell laid off a total of about 13,000 people.

Last year, there were rumors that "Dell has formulated a plan to reduce production and purchase of domestic chips and components year by year", "Dell has laid off employees in China", and "Dell will withdraw from China". In response, Dell has always kept a low profile and refused to comment on the rumors.

According to information, Dell has three major production bases in Xiamen, Chengdu and Kunshan, of which the Xiamen and Chengdu factories are fully self-operated.

The reporter found on job-hunting sharing platforms such as Maimai that an insider had previously revealed that Dell China had made major adjustments and the sales team at the Xiamen factory had been greatly reduced, which attracted much attention and discussion.

However, Dell's senior vice president Wu Dongmei responded at a public event at the end of last year: China has always been an important international market for Dell, and they will not withdraw. "We have never released any of the so-called 'information' or 'comments' mentioned above. Dell's global code of conduct is not to comment on 'rumors'. This is our consistent position. But unfortunately, this attitude has been wrongly and one-sidedly interpreted as 'no comment means confirmation', and some people even fabricated 'the relevant news came from Dell officials'. It can be clearly said that these rumors are absolutely 'rumors'!" Wu Dongmei said.

Performance under pressure, AI is being promoted

The industry believes that the reason behind the continuous layoffs and adjustments is primarily the pressure from the market and declining performance.

In the past few years, the computer market has encountered downward pressure from the global economy and competition from mobile phones, tablets, etc., resulting in stagnant or even declining growth, and Dell's decline has exceeded the industry average.

According to data from Counterpoint Research, Dell's shipments fell by 20% in 2023, while global PC shipments only fell by about 14%. According to IDC data, the top five PC manufacturers in Asia Pacific in 2023 are Lenovo, HP, Dell, Asus, and Acer, among which Dell's shipments fell the most, reaching 30.3%.

The TechInsights report shows that among the mainstream laptop manufacturers in the second quarter of 2024, Dell is the only manufacturer that experienced a year-on-year decline, but the decline was small (-1%). Its laptop shipments were 8.3 million units, and its share ranked third in the world, after Lenovo and HP.

Dell's performance in the most recent quarter disappointed investors. On May 31, the day after the company released its latest quarterly results, the company's stock price plummeted by nearly 18%, and industry insiders expressed concerns about the impact of rising demand for artificial intelligence servers on Dell's overall profitability.

A Dell official said that due to the increase in the mix of AI servers, inflation in input costs and an intensified competitive environment, the company's gross profit margin is expected to drop by about 150 basis points in fiscal 2025.

In line with the AI ​​wave in recent years, Dell has been making frequent efforts in AI since this year.

Reporters noted that during the Dell Technologies World event in May, Dell CEO Michael Dell emphasized how the company is leading the artificial intelligence revolution.

On June 24, the "'Computing Power Real AI' Dell Commercial Client AI PC Strategy Release High-end Customer Conference" was held in Shanghai. The conference focused on how AI PC can be deeply integrated with application scenarios in the AI ​​era. At the conference, Dorothy, global vice president of Dell Technologies Group and general manager of channel sales in China, also shared her thoughts on AI PC and its ecological environment, as well as Dell Technologies AI PC strategy and advantages.

According to IDC estimates, AI PC shipments will approach 50 million units in 2024, and will grow to 167 million units by 2027. AI PCs will account for about 60% of global PC shipments. The era of AI PCs has arrived.

"At present, Lenovo, Dell and other companies are investing heavily in AI PCs and launching related products. This does represent a future development direction for PCs, including AI large-scale model operation, AI smart assistants, AI office collaboration and other application directions." A consumer electronics industry analyst told reporters, but the promotional significance of AI PCs is still greater than their practical significance. In the future, it will be more important for PC companies to let users truly experience and recognize the intelligent convenience of AI PCs and stand out in the homogeneous AI competition.

(Editor: Zhang Jingchao, Reviewer: Li Zhenghao, Proofreader: Zhai Jun)