Managed services News
Sources: Dimension Data Layoffs Hit Across Multiple Departments
Dimension Data has been hit by layoffs in recent months, sources told CRN, as part of a push to cut costs at the solution provider.
The layoffs over the last six months have hit departments across the company, including customer service, alliances, solutions engineers and sales, one source said. Another source said there have also been layoffs in the managed services group.
The layoffs occurred in the Americas region, sources said, though there have also been publicized reports of layoffs in other regions. The total number of layoffs that have occurred at the company isn't exactly clear. Dimension Data has 31,000 employees globally, according to its website.
"People are really unsettled," one source said. Sources said multiple laid-off employees have jumped to competitor World Wide Technology. CRN reached out to WWT about the hires, but has not heard back.
Dimension Data declined to comment, citing corporate policy against commenting on this type of issue.
The layoffs come as part of a push by parent company NTT to cut costs at Dimension Data, a source said. NTT has also cut down on employee travel, the source said. Tokyo-based NTT has been the parent company of Dimension Data since 2010 when it acquired the company for $3.3 billion.
Dimension Data also recently lost CEO Brett Dawson, announcing on June 10 that the executive had resigned after 12 years at the helm of the solution provider. Dawson has been replaced by Chief Operating Officer Jason Goodall
On an earnings call last August, NTT CFO Jun Sawada said Dimension Data had been told to focus on cutting costs, as the solution provider is "not generating a profit at this stage."
"We have talked to Dimension Data and instructed them to seek increases in both operating revenue and operating income. In other words, they should have guidelines for both top line and the bottom line," Sawada said on the call.
Dimension Data, No. 11 on the 2016 CRN Solution Provider 500 list, had previously been pushing to aggressively drive up its sales, with a revenue target of $12 billion by 2018. To accomplish that, Dimension Data has been actively making acquisitions, including its 2014 blockbuster acquisition of Nexus, to nearly double its presence in the U.S. market and, more recently, acquiring Ceryx to strengthen its offerings around the Microsoft public cloud.
One source said the spurt of acquisitions in the last year has resulted in significant position overlap, spurring a "realigning and readjusting of the business" to cut back on redundancies.
Dimension Data Americas ended 2015 with 26 percent organic sales growth, including 29 percent growth in the security business, 22 percent growth in the networking business and 19 percent growth in the data center business, Americas CEO Mark Slaga told CRN last fall.
"We are on track to triple the business," Slaga said at the time, referring to the U.S. business. "I feel really pleased and proud."
Slaga declined to comment when reached out to directly by CRN about the reported layoffs.