Dell Layoffs, Exec Changes, New AI And Go-To-Market: 5 Big Things To Know
From big to small, Dell partners have told CRN that the changes are moving the Round Rock, Texas-based worldwide leader in servers and storage closer to their businesses.
Since the curtain closed on July, big changes have been rolling out at Dell Technologies with a new command structure, a new go-to-market, new generative AI offerings — then earlier this week — layoffs.
CRN has been talking with Dell partners to gauge their reaction to the announcements and from big to small, partners have said the changes are moving the worldwide leader in servers and storage closer to their businesses.
The change in go-to-market comes after Round Rock, Texas-based vendor’s first quarter sales were off by 20-percent, with its market-dominating storage products off 11 percent. Starting on Monday, Dell now offers its direct sellers higher compensation to move storage deals through the channel.
“We’re taking the gloves off,” Dell sales boss Bill Scannell told CRN.
Dell Titanium partner at Somerset, New Jersey-based Melillo CEO Scott Dunsire – a former HPE channel chief – called it “genius.”
“I haven’t seen a move like this in a long time, if ever, and I ran channels at HPE for 12 years,” Dunsire told CRN. “Dell has just been getting better and better and better at engaging partners ... This is a genius move, from my perspective, to send the right message to the team at Dell. ‘Hey, we’re serious about working with partners. You want to get paid more? This is what you have to do.’”
The new sales motion, however, came with layoffs to Dell’s sales force as it ropes more partners into those deals.
“We don’t make these decisions lightly,” the company said in a statement.
Dell stock has moved higher amid the tumult, with shares closing at $52.92 on August 31 and rising to $55.54 in early afternoon trading on Wednesday.
Co-COO Chuck Whitten And CFO Tom Sweet Depart
Two years after he was given the second-highest ranking job — a responsibility he shared with co-COO Jeff Clarke — at Dell Technologies, Chuck Whitten (pictured) put in his three weeks notice.
The former Bain & Company executive had run the southwest division of the respected corporate consultancy prior to taking the co-chief operating officer role at Dell alongside Jeff Clarke. While at Bain, Whitten was Dell’s top advisor for 12 years. Whitten’s departure was a surprise to partners who expected him to succeed company founder Michael Dell. His resignation is effective Aug. 18. He departs with a severance package worth about $19 million. Clarke will remain Dell’s chief operating officer.
Additionally, longtime Dell CFO Tom Sweet retired at the end of last week after spending 26 years with the company. He announced that he would leave in March. He was replaced by the company’s comptroller, Yvonne McGill, who has been with Dell for 26 years. Her first day was Monday.
Dell has approved a base salary of $650,000 for McGill, the firm’s first-ever woman CFO. McGill also received 73,253 shares of time restricted stock.
“Being chosen to serve as Dell Technologies’ chief financial officer is truly an amazing opportunity and is sure to be an exciting journey. Today is my first day on that journey,” McGill wrote Monday in a post to LinkedIn. “I’m honored and humbled to have the trust of Michael Dell and the board of directors, to lead such a talented and dedicated finance organization and to continue to be a part of our amazing future!”
New AI Products
Dell and Nvidia announced Project Helix at Dell Technologies World in May, which combined the company XE 9680 servers with eight of NVIDIA H100 processors that provide the compute necessary to train large language models.
Last week Dell unveiled validated designs for hardware and networking capable of training LLMs, querying the data, and handing the added stress of shifting that work between environments which the massive data sets require.
New AI services include strategies and road mapping as well as implementation of the full stack of validated designs.
New Go-To-Market Strategy In Storage
Dell’s Sales Boss Bill Scannell (pictured) calls this the biggest change ever to the company’s go-to-market strategy. Dell founder and CEO Michael Dell created the direct-to-consumer model that bypassed the channel in the 1980s.
On Monday, Scannell completed a 180-degree turn with an order to Dell’s direct sales forces to move storage sales through channel partners if they want bigger commissions. The company also quadrupled the number of partners that its sales team can work with on storage accounts.
“We think this could open up the floodgates. I spoke to half a dozen partners this week and a couple of them about this particular strategy and they just love it,” Scannell told CRN. “This will drive better collaboration between Dell sellers and our partners that will drive better business outcomes. For our customers. We’re going to generate more pipeline, we’to gain share. We’re going to sell more the entire portfolio by doing this and that’s going to just deliver strong results for Dell, and for our partners.”
Michael Dell On Go-To-Market, Whitten’s Departure
Michael Dell (pictured) praised the go-to-market changes, saying the company’s committment to its reseller channel runs deep.
“We have decades of experience working with our partner community to accelerate transformation for our customers,” he said. “The ‘partner-first strategy for storage’ extends our partner commitment and unites the strengths of our partners with the advantages of our world-class team and solutions.”
Additionally, on July 28 when Whitten announced his departure, Michael Dell thanked him for his many contributions over 14 years as part of the “extended Dell team.”
“We’ve accomplished a lot together and I know great things are to come for Chuck and for Dell Technologies,” Dell wrote.
In February, Dell announced that it would eliminate 6,650 jobs, about five percent of the company’s workforce.
At the time it appeared many of those laid off worked in sales, based on job seekers’ posts to LinkedIn.
Then on Monday, six months after the February announcement, and the same day it rolled out its new go-to-market strategy, Dell said that “some” sales roles would be eliminated. The company would not say if these were in addition to the cuts it called for earlier.
This time, Dell said sales would be targeted. That does appear to be the role held by a majority of the two-dozen posts to LinkedIn since Monday from people saying they were laid off from Dell.
“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.”