Dell Technologies Layoffs Hit Sales, ‘New Logo’ Acquisitions Team: Sources

‘The (new logo) acquisitions organization at Dell pretty much no longer exists. A small percentage of reps were repurposed to other places in the organization. And the rest were let go. It was across the whole country. From the Northeast team to California, central, everybody in between,’ one former Dell employee tells CRN.

Dell Technologies has carried out a round of job cuts that includes its “new logo” account acquisitions team and a number of sales positions, sources told CRN.

In a statement provided to CRN Tuesday, the company said: “I’m sure you know that while we aren’t going to get into specifics, we are always assessing our business to remain competitive and ensure we are set up to deliver the best innovation, value and service to our customers and partners.”

One of the impacted Dell employees who spoke to CRN said the cuts fell hard on what Dell calls its acquisitions team, a group of around 150 sales professionals—not including support staff—that must win “new logos” deals among commercial and enterprise companies that haven’t done business with Dell in the last three years.

“The (new logo) acquisitions organization at Dell pretty much no longer exists. A small percentage of reps were repurposed to other places in the organization. And the rest were let go. It was across the whole country. From the Northeast team to California, central, everybody in between,” the former Dell employee said.

The former employee told CRN he believes that Dell’s relentless AI push caused the company to zero in on the enterprise account acquisitions team as a target. During Dell’s first quarter reported on May 29, the company took orders for $12.1 billion in AI servers and shipped $1.8 billion in AI servers. The company saw a “lower mix” for traditional servers.

“I think it takes fewer but also more specialized resources to tackle that (AI) opportunity than what the legacy business has been with PCs, traditional storage, traditional servers,” the former employee said. “I think they need fewer, more specialized sellers than a larger number of generalists.”

The former employee said he was told that the move to eliminate the acquisitions team was made within the last month.

“I felt a little safe. What I was told by my leadership is that as of a month ago, we were safe and there was a last-minute change of plans. My manager had their org chart already and then within a month they made a pivot. We knew that something was coming because Bain [& Company] was involved in the reorganization and restructuring. We knew that there were a lot of middle management positions that would be going away. We didn’t realize it would impact the frontline people as well. That was a surprise.”

CRN has reached out to Bain & Company for comment.

The laid-off employe told CRN that given the depth of the cuts and the quality of the people he has seen let go, he would not be surprised if Dell decides to hire some of them back. “There’s a lot of good people that got let go,” he said.

The CEO of an SP-500 solution provider company, who did not want to be identified, said he is moving quickly to try to hire top performers from the new logos account organization that have been laid off.

“It’s a great team with some really good people,” said the CEO. “We have won a lot of business working with them. My objective is to hire some of these people to go after net new business. They know how to hunt and how to get new customers. I see this as a big opportunity for the channel to hire some of these people. There is some good talent available.”

The CEO said he believes the elimination of the account acquisition team will definitely impact Dell’s ability to capture net new business. “We have had many years of success working with that Dell acquisitions team,” he said. “I’m not surprised by anything in times like these, but this is disappointing.”

On LinkedIn, some people said they were part of a larger, overall reduction in the workforce that hit many in sales roles.

A CRN review of the job cuts posted publicly showed several account executives, security architects, managed security services, inside partner account manager, channel account manager and district sales manager, while the location of the workers included positions in Round Rock, Michigan, Illinois, Tennessee and Massachusetts.

Another CEO of a longtime Dell partner, who did not want to be identified, said he has already received a resume from a 20-year-plus Dell veteran who was impacted by the layoff. “I have a resume on my desk from someone let go this morning,” he said.

The CEO said the higher-salaried Dell employees that have been with the company for many years have a “bigger target on their back” when cuts are made. He said he believes the layoffs were due to a rapidly shifting technology landscape.

“When things don’t perform based on what’s happening in the industry and the market, changes have to be made,” he said.

The CEO said he expects the Dell layoffs to ultimately result in the company relying even more heavily on partners.

“The more the OEMs lay people off, the more the customers need to rely on partners,” he said

In February the Round Rock, Texas-based Dell said it had 108,000 employees, which is 24,000 fewer than at the same point in 2020, a five-year workforce reduction of 19.4 percent, according to public filings.

Other large technology vendors have also carried out job cuts this year, with Intel and Microsoft both announcing large cuts to their workforce.

In July Microsoft cut 4 percent of its workforce, or about 9,000 jobs. Intel plans a massive 25 percent reduction to its workforce this year. Dell’s rival in PC and infrastructure, Lenovo, announced a 3 percent workforce reduction last month.

While Dell’s server and storage revenue has been growing on the back of delivering the massive compute needed to develop enterprise AI capabilities, the company’s PC sales have been weaker than hoped with a 19 percent decline last quarter in Dell’s consumer PC business.

The company recently shuffled the top ranks to move former Client Solutions Group president Sam Burd out of the day-to-day running of its PC business and into the role of chief strategy officer. Meanwhile, Dell’s vice chairman and COO, Jeff Clarke, will take command of PCs.

In its first fiscal quarter ended May 2, Dell reported net income of $965 million, a three percent decline, on a five percent increase in sales to $23.37 billion. That compares with net income of $992 million on sales of $22.24 billion in the year ago quarter.

On the May 29 call, Dell also announced it had repurchased $2.4 billion in stock over the first quarter – 22.1 million shares at an average purchase price of $90 per share – and paid a dividend to shareholders of $0.53 per share.

Dell shares closed trading yesterday at 130.48 up 11.9 percent year to date.

Since May 2022, the company said has “returned $13.2 billion to shareholders through stock repurchases and dividends.” In that same time, Dell has shrunk its headcount from 133,000 employees in January 2022 to 108,000 at the beginning of this year, not including the recent cuts.