Austin's second largest employer slashing unspecified number of jobs
Tech giant Dell Technologies, the largest publicly traded company in the Austin area and the second largest private-sector employer, is eliminating an unspecified number of jobs this week.
The Bloomberg news service reported that Dell’s chief operating officer, Jeff Clarke, delivered news of the impending job cuts during a company-wide meeting September 14. Round Rock-based Dell employs about 14,000 people in the Austin area and about 165,000 people worldwide.
In a statement provided to the news media, Dell says the decision to trim its workforce “is to make sure we’re doing what’s best for the long-term health of our company and our team.”
The workforce reduction comes as Dell copes with what Bloomberg calls “uneven demand” for its products, with consumers and businesses scooping up personal computers to accommodate working from home, but with some businesses exercising caution in buying hardware for data centers.
In the statement, Dell says it’s evaluating its business to ensure the right number of employees are in the right roles “in areas where customers need us most.”
“And we’re addressing our cost structure to make sure we’re as competitive as we should be now and for future opportunities,” the statement goes on to say. “While we do this type of organizational review regularly, and while it always results in some job loss or restructuring, we recognize that there is nothing routine about today’s environment.”
In May, Bloomberg reported that Dell had frozen external hiring, internal promotions and raises for the rest of the current budget year, and had discontinued matching contributions to employees’ 401(k) plans. Clarke cited the state of the economy and forecasts of lower spending on IT as reasons for those steps.
For the first six months of its current budget year, Dell reported a 1 percent decline in revenue and a 72 percent slide in profit compared with the same period a year ago. Revenue for the period totaled $44.6 billion, while profit stood at nearly $1.3 billion. Operating expenses fell 7 percent to $12.2 billion. The company is carrying close to $60 billion in debt.
During an August 27 call with Wall Street analysts, Rob Williams, senior vice president of investor relations at Dell, expressed optimism about the financial outlook for the company over the long haul.
“The long-term trends in our business are favorable, and our sources of advantage are real. Though there is a high degree of uncertainty right now, our strategic position and the secular technology trends create long-term growth opportunities for us,” Williams said.
Michael Dell, CEO of his eponymous company, famously started Dell Technologies from his dorm room at the University of Texas at Austin. Last week, he was named in the 2020 edition of the Forbes 400, which ranks the 400 richest Americans. Forbes shows Dell’s net worth as of July 24 stood at $35.6 billion. Last year’s Forbes 400 pegged Dell’s net worth at $32.3 billion.