Dell may layoff 2,000 jobs after EMC buyout

After acquiring EMC Corp. in the largest technology acquisition ever, Dell Technologies plans to reduce its staff size by at least 2,000 to 3,000 people later this year, according to unnamed people familiar with the plans cited by Bloomberg.

Valued at about $67 billion when it was first announced almost a year ago, the transaction to combine Dell, a major manufacturer of PCs and servers and EMC, which makes data-storage and data centre products, on September 7, 2016, makes them the world’s largest privately held technology company.

“This is an historic moment for both Dell and EMC. Combined, we will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data center, converged infrastructure, hybrid cloud, mobile and security,” said Michael Dell, chairman and chief executive officer of Dell Technologies, in a statement.

“Our investments in R&D and innovation, along with our 140,000 team members around the world, will give us unmatched scale, strength and flexibility, deepening our relationships with customers of all sizes,” added Dell.

Most of the job cuts will come in the U.S. and in areas such as supply chain and general and administrative positions, and some marketing jobs, said the people who asked not to be named as the dismissals aren’t public yet.

Industry observers see the two companies as largely complementary, but Dell has admitted that there are areas of overlap which would be expected to result in job cuts.

While Dell is looking for cost savings of about $1.7 billion in the first 18 months after the EMC transaction is completed, it is also largely concentrating on using the merger is to increase sales, with cost reductions seen as secondary. The new company has 140,000 employees.

“As is common with deals of this size, there will be some overlaps we will need to manage and where some employee reduction will occur. We will do everything possible to minimize the impact on jobs,” Dave Farmer, spokesman for Dell, wrote in an e-mail. “We expect revenue gains will outweigh any cost savings, and revenue growth drives employment growth.”

Michael Dell, Chairman and Chief Executive of Dell Technologies declined to give an estimate for the coming job reductions in a statement released on September 7th.

However, the combined company is intended to create a one-stop shop for business technology, Dell has said.

Earlier this week, Michael said that the company’s private status will allow it to invest in new areas including connected devices, otherwise known as the Internet of Things (IoT), as well as cyber security, new cloud computing, and predictive analytics technologies.

“We are at the dawn of the next industrial revolution,” Dell said. “We have the products, services, talent and global scale to be a catalyst for change and guide customers, large and small, on their digital journey.”

Source: Bloomberg