Dell Confirms Sales Layoffs As Part Of New Partner-Led Storage Strategy
‘Some members of our sales team will leave the company. We don’t make these decisions lightly, and we’ll support those impacted as they transition to their next opportunity,’ a Dell spokesperson says.
Dell Technologies has confirmed that it will cut jobs among its core sales teams as it adopts a new partner-led go-to market model that pays its direct sales force more to sell storage products through the channel.
“Some members of our sales team will leave the company. We don’t make these decisions lightly, and we’ll support those impacted as they transition to their next opportunity,” a Dell spokesperson said. “We’re always assessing our business to remain competitive and ensure we’re set up to deliver the best innovation, value and service to our customers and partners.”
Dell would not confirm whether these layoffs were a part of or in addition to the 6,650 job cuts the company announced in February.
Partners said they see the layoffs as a chance to double down on Dell and drive sales growth.
“This is very positive news for the channel,” said one partner, who did not want to be identified. “Dell can’t afford to run the same sales model the way they have been. This is more opportunity for the channel. They are counting on the channel to drive growth.”
Bob Venero, president and CEO of Future Tech Enterprise, a Fort Lauderdale, Fla.-based Dell Global Titanium partner, said he does not know anything about layoffs but applauded the new partner-led storage go-to-market model.
“This is testament to how the channel has performed for Dell over the last decade,” said Venero. “Dell has a responsibility to its customers, partners and shareholders to be able to pivot to what the market and industry requires. This strategy aligns to the change in the market that has more sales going through the channel.”
Venero praised Dell CEO Michael Dell and the company’s leadership for realizing the value of its partner ecosystem. “Michael and his team have proven year after year that they understand the value driven by its partner community and what that means for growth.”
C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company and a Dell Titanium partner, said he sees the new strategy as a move by Dell to double down on the channel to drive sales growth.
What’s more, he said, the layoffs provide an opportunity for Advizex to pick up some hot tech talent. Advizex, in fact, has hired a number of Dell employees including Vice President of Consumption Chris Allmen, who joined Advizex in March.
“I feel empathy for the folks impacted by the layoffs but as we have demonstrated at Advizex it is an opportunity for us to hire great talent,” he said. “This also gives Dell an opportunity to make a bigger bet on the channel. We are going to take full advantage of that.”
Howdyshell said he sees Dell stepping up its commitment to drive sales growth working hand in hand to close deals with partners. “There shouldn’t be a question any longer about Dell wanting to be direct,” he said. “This is a clear opportunity for the channel to step up and double down on Dell.”
‘Biggest Change Ever’ For Dell’s Go-To-Market
In an interview with CRN unveiling the new strategy, Dell President of Sales and Customer Operations Bill Scannell called the shift the “biggest change ever” in Dell’s go-to-market model.
“This is massive. This is exciting. We’ve been working on this for a while because we want to make sure we get it right,” he said. “But we got it right and it’s supported by Michael Dell, [Dell Vice Chairman and COO] Jeff Clarke, all the way through the organization.”
Scannell said the new go-to-market model “opens the floodgates” for Dell direct sales reps to work with partners. “With this new strategy around partner-first, every one of our reps is going to look at their comp plan and see, ‘I make X if I sell it directly. I make X-plus if I sell it through a partner,’” he said.
Dell President of Sales, Global Theaters and Dell Technologies Select John Byrne said that by coordinating sales teams with partners Dell can multiply the efforts of both.
“We’re making it very clear if there was any confusion,” he told CRN. “There is no confusion any longer. The message to channel partners: Call the reps. To the rep: Call your partners. The gloves are off. Go make more money. Go sell the best storage portfolio in the business. Go keep taking market share. It’s big and it’s exciting.”
The new round of cuts comes just two weeks after Dell Co-COO Chuck Whitten resigned suddenly and just six months after Dell laid off 6,500 employees, or approximately 5 percent of the then-133,000 strong workforce in February.
The storage sales offensive comes after the company reported an 11 percent drop in storage sales to $3.75 billion for its first fiscal quarter ended May 5. That compares with sales of $4.23 billion in the year-ago quarter.
Additional Reporting By Steven Burke