Tech giant Dell Technologies, the largest publicly traded company in the Austin area and the second largest employer in the private sector, is eliminating an unspecified number of jobs this week.
Bloomberg news service reported that Jeff Clarke, Dell’s chief operating officer, announced the impending downsizing during a company-wide meeting on September 14th. Dell, headquartered in Round Rock, has approximately 14,000 employees in the Austin area and approximately 165,000 people worldwide.
In a statement to the news media, Dell said the decision to reduce its workforce is to make sure we are doing what is best for the long-term health of our company and our team.
The downsizing is due to Dell coping with what Bloomberg calls “uneven” demand for its products. Consumers and businesses are exploiting personal computers to work from home, but some companies are cautious about purchasing data center hardware.
In the statement, Dell said it is evaluating its business to ensure the right number of people are in the right roles “in areas where customers need us most”.
“And we are following our cost structure to ensure that we are as competitive as we should be now and to seize future opportunities,” the statement said. “While we carry out this type of organizational review on a regular basis and this always leads to a loss or restructuring of jobs, we recognize that today’s environment is not routine.”
In May, Bloomberg reported that Dell had frozen external hires, internal promotions and raises for the remainder of the current fiscal year, and stopped corresponding contributions to employee 401 (k) plans. Clarke cited the economic climate and projections of lower IT spending as reasons for these steps.
In the first six months of the current fiscal year, Dell recorded a 1 percent decline in sales and a 72 percent decline in profits compared to the same period last year. Revenue for the reporting period was $ 44.6 billion, while profit was nearly $ 1.3 billion. Operating costs decreased 7 percent to $ 12.2 billion. The company has nearly $ 60 billion in debt.
Speaking to Wall Street analysts on Aug. 27, Rob Williams, Dell’s senior vice president of investor relations, was optimistic about the company’s long-term financial prospects.
“The long-term trends in our business are favorable and our sources of advantage are real. While there is currently a high level of uncertainty, our strategic position and secular technology trends create long-term growth opportunities for us, ”said Williams.
Michael Dell, CEO of his company of the same name, founded Dell Technologies in his dormitory at the University of Texas at Austin. Last week he was featured in the 2020 edition of Forbes 400, which lists the 400 richest Americans. Forbes reveals that Dell’s net worth as of July 24th was $ 35.6 billion. Last year’s Forbes 400 put Dell’s net worth at $ 32.3 billion.