After years of booming investment and innovation, a tech industry in transition is now seeing massive layoffs everywhere — and Austin-born tech leader Dell is no exception.
In a memo to employees Monday, Round Rock-based Dell outlined a plan to redistribute its sales force and focus on artificial intelligence innovations to position itself to compete in the future. As part of that redistribution, Dell appears to have made the decision to cut its sales force and some management positions, and eventually its global workforce.
“We are becoming leaner. We are streamlining management layers and reprioritizing where we invest,” executives Bill Scannell and John Byrne wrote in the internal email, as reported by Business Insider.
Dell employees in the Austin area, including some longtime employees, took to social media to confirm the layoffs, and some posted online estimates that the global layoffs could be as high as 10,000, though that number has not been confirmed by Dell officials.
Like many tech companies, layoffs aren’t a new trend for Dell.. In a filing with the Securities and Exchange Commission, the tech giant said it had 120,000 employees worldwide as of Feb. 3, down from 133,000 employees in February 2023, a decline of nearly 10%.
More recently, Intel, which works closely with Dell, announced plans to lay off 15,000 employees, or more than 15% of its total workforce, the company said in a memo to employees Thursday.
Doubts about AI’s ROI numbers have surfaced on Wall Street, but many companies—like Meta, Tesla, and now Dell—believe it’s the future and want to position themselves for profitability when, or if, that bet comes to fruition.
Layoffs mount in Austin tech sector
The layoffs at Dell are part of a pattern of cutbacks that many tech companies have made in recent years. Just this year, Google announced layoffs that could affect workers in Austin.;Video game software maker Unity announced plans to cut 100 jobs in Austin; cloud computing company VMware said it would cut 577 jobs in Austin; and travel platform Expedia said it would lay off dozens of employees in Central Texas.
The concern over the tech sector is compounded by the fact that another of Austin’s largest companies, Tesla, has cut its workforce significantly this year, laying off about 10% of its global workforce. Like Dell, Tesla CEO Elon Musk is adamant that his company is simply in transition, and he plans to get back on track by investing heavily in AI innovation.
Beck Andrew Salgado covers news in Austin’s business ecosystem for the American-Statesman. To share additional tips or ideas with Dirty, email Bsalgado@gannett.com.
