Dell is to trim the workforce following its $60bn-plus buy of storage titan EMC, with between 2,000 to 3,000 heads expected to roll. But if sales don’t track to management expectations, sources told us to expect more.
A Bloomberg report claimed Dell will seek out $1.7bn in cost savings in the next eighteen months – but it will seek to beef up sales by several times that amount, minimising the need to thin out more.
A Dell spokeswoman gave us the same line Bloomberg carried: “As is common with deals of this size, there will be some overlaps we will need to manage and where some employee reduction will occur.
“We will do everything possible to minimise the impact on jobs,” he said, “We expect revenue gains will outweigh any cost savings, and revenue growth drives employment growth”.
The redundancies are likely to fall mostly in the US and in roles including supply chain, marketing and general and administrative functions.
Dell completed the acquisition of EMC on Wednesday 7 September, creating a corporate giant turning over more than $70bn and which employs 140,000 people.
Both companies are under pressure from cloud services rivals – in the case of EMC its revenue growth has flatlined, while Dell is still trying to become more than a PC player.
To help pay for the deal Dell has so far got sold off some of its real estate including Perot Systems, while private equity firms are buying the software business, which includes Quest Software, Sonic Wall and some other bits.