I am skeptical,
in fact, I am convinced these layoffs are about declining sales and mentioning AI is just a distraction. But I will save that analysis for a follow-up post.
Dell announces layoffs, pivot to AI innovation as tech industry continues to scramble
After years of booming investment and innovation, a tech industry in transition is now seeing mass layoffs seemingly everywhere — and Austin-born tech leader Dell is no exception to this trend. . . .
Austin-area Dell employees, including some longtime employees, have taken to social media to confirm the layoffs and some have posted online estimates that worldwide layoffs could total 10,000, though this number has not been confirmed by Dell officials.
Like many tech companies, layoffs are not a new trend for Dell. In a filing with the Securities and Exchange Commission, the technology giant reported it had 120,000 global employees as of Feb. 3, down from 133,000 employees in February 2023 — a decrease of nearly 10%. . . .
Gross sales at Dell are back to late 2018 levels, (down about 15% if we account for inflation.)
It is not surprising that it cut ~20% of its workforce.
So why the distraction?
Why mention AI so prominently (twice) if that is not the case?
Well, CEOs like to portray their companies as strong.
The media likes the clicks that mentioning AI gets, and Pro-Biden media bias may also play a role.
Whatever the reason, things ain’t great at Dell, and it ain’t AI that’s causing it. Someone just wants you to think that.
All part Harris-nomics! Don’t worry even though the economy is shedding full time good paying jobs we have been adding part time low wage dead end jobs! The greatest economy ever!
AI is definitely a buzz word of a moment and used more than it should be. Declining sales are definitely part of the problem, Peloton for example is a premium product that is probably just too expensive plus after-sale it relies heavily on a subscription model.
However a lot of these are tech companies who are investing heavily in automation and introducing new processes that eliminates many of the human filled positions.
An example of AI impacting is in the Health insurance sector, companies are finding postions such as underwriters can be reduced and replaced with AI.
There has been a pretty big downtrend in sales of desktops, notebooks laptops, smart phones all it since about the end of 2017. Dell has been a bad performer within in that. Once every website a person tried to visit could be blocked by three TV-like ads, a cookie disclaimer and an offer to send you notifications, there was just no need to upgrade one’s home or business hardware. (Although personally, I think those things made technology worse lol.)
That may change with AI (so things might pick up), but for now, there is just no need to upgrade one’s computer hardware.
A person who says the employment market is strong is completely ignorant of the direction we are heading. I am not talking about some hypothetical direction or predicted direction. “I’m in an airplane who cares that it’s falling at max velocity,” is just not a sensible statement.
I’m skeptical about these layoffs at Dell. It seems to me that the focus on AI might be a distraction from the real issue, which could be declining sales. I’ll delve into this more in a follow-up post.
