Dell Technologies Earmarks $416M For Terminations, Pushes Ahead With EMC Cuts

Dell Technologies may be advertising thousands of open positions worldwide, but it's also in the midst of a massive effort to eliminate overlapping positions and complete an aggressive cost-cutting program begun by EMC more than a year ago.

As of Feb. 3, the Round Rock, Texas, IT giant had put $416 million in reserve to pay severance benefits, a total that dwarfs the $26 million it held in reserve for the same purpose a year earlier, according to a U.S. Securities and Exchange Commission filing.

In the run-up to its landmark $58 billion acquisition of EMC in early December, Dell said overlap between the two companies – in both product lines and workforce – were minimal.

[Related: Partners Praise Dell EMC Channel Hiring Blitz As 'A Great Thing For Us']

And while the $416 million reserve puts the personnel overlap in clearer focus, a Dell EMC spokesman would not say how many layoffs that total would cover.

"While we make every effort to minimize the impact on jobs, as is common with deals of this size, there were some overlaps in some roles and some employee reduction," the spokesman said in an email to CRN. "We expect revenue gains will outweigh any cost savings, and revenue growth drives employment growth over time."

Included in the $416 million total is $70 million connected to EMC layoffs begun in late 2015 as part of an $850 million corporate cost-cutting program the company started amid flat earnings and mounting pressure from activist investors to boost share value.

At the beginning of that program, EMC said it would spend between $130 million and $150 million on layoffs. Dell Technologies will complete those layoffs as part of the larger severance program, the company said in the SEC filing.

Some solution providers in recent weeks have told CRN that they haven't seen Dell EMC personnel actions that they expect to have a significant impact on their business.

Mark McKeever, principal at MicroAge, a Tempe, Ariz.-based solution provider that works with Dell EMC, said that while personnel cuts at Dell EMC haven't had an impact on MicroAge's business, the vendor's channel program has certainly taken on more characteristics of the legacy EMC program.

"Our channel account manager is the same person, so that keeps a lot of consistency," McKeever said. "But there is a more EMC feel in the program. You can feel it in terms of the higher requirements. The compliance for putting plans in has gotten tougher. Dell was more freewheeling. Now, the amount of work to do to get your plan approved and through the system is more demanding. It's mostly how EMC did things, making sure people are complying with spirit and intent of the program."

Dell Technologies is currently advertising more than 3,000 open positions worldwide. The company reported revenue for its 2017 fiscal year ended Feb. 3 of $61.6 billion, a more than 21 percent increase year-over-year.

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