Dell has said that it will be cutting jobs even more this year in an effort to save expenses, as per a report. The PC manufacturer announced its cost-cutting initiatives, which may very well involve another round of layoffs, citing concerns about the sluggish demand for PCs and the comparatively lower profitability of servers optimized for artificial intelligence (AI) compared to its other products.
As per media reports, Dell has also mentioned that a “continued reduction in our overall headcount” will occur during the fiscal year that ends in February 2025 as a result of job reorganizations, restrictions on external hiring, and other measures.The corporation let off employees in June of this year, primarily in the sales division. According to reports, the corporation employed close to 120,000 people full-time globally in February.
What Dell said about layoffs
“We remain committed to disciplined cost management in coordination with our ongoing business transformation initiatives and will continue to take certain measures to reduce costs,” Dell said in a regulatory filing.
Dell’s concern behind announcing the job cuts warning
As per the reports, Dell is concentrating on growing its company by offering powerful servers intended for artificial intelligence applications.Investor excitement about this new development area is seen in the 39% increase in the company’s stock price. However, because these Al servers require pricey computer processors from firms like Nvidia, Dell is concerned about the profitability of the equipment sold by the company and its competitors, like Super Micro Computer (SMC) and Hewlett-Packard Enterprise (HPE).
Even though overall profit increased in the most recent quarter compared to the prior one, Dell claimed that a larger percentage of Al server sales had an influence on margins, the article stated. In the meantime, after a two-year decline, the company’s more established PC division has not recovered as quickly as anticipated.
The business reported $12.4 billion in revenue for the fiscal second quarter of last month, slightly below projections and 4% less than the same period last year.
Sales of commercial PCs continued to grow, but revenue from consumer PCs fell by 22% on an annual basis.
Also read: Unveiling the Ethical Imperatives: Navigating the Intersection of AI and Cybersecurity
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