Computer giant Dell continues this year’s tech industry layoffs, firing around 12,500 employees or 10% of its global workforce. This move comes as Dell implements its new artificial intelligence (AI) strategy.
An internal memo dated August 6, 2024, informed employees of the decision. It laid out Dell’s plan to centralize its sales teams and build a new AI-powered sales unit.
Since February 2023, Dell has shrunk its workforce from 130,000 to 120,000. In October 2023, it began trialing various AI tools. Today, the company has integrated AI across product development, content management, sales tools, and customer service.
Meanwhile, networking giant Cisco has slated its second round of layoffs this year as it shifts its focus to AI and cybersecurity, which it considers “higher growth areas.” In June, the company committed $1 billion to invest in AI startups.
The number of affected employees is expected to be similar to the 4,000 employees the company fired in February.
AI as the common denominator
As of August, a staggering 124,000 workers have been laid off in the tech industry. While AI is not the sole reason for these layoffs, it is the major driver.
In January, IT giant IBM laid off 3,900 employees and stopped hiring for positions that AI could replace. By August, IBM announced it would replace 8,000 jobs with AI.
Facebook’s parent company, Meta, also laid off an undisclosed number of employees. CEO Mark Zuckerberg admitted that the cuts were made so that the company could invest in “long-term, ambitious visions around AI.”
These are just some of the major layoffs made in the name of AI, and the trend is not likely to slow down. The trend is set to dominate the rest of the year, with the biggest players in tech spending more and more money on AI.
For business process outsourcing (BPO) firms and their clients, these layoffs signal the need to discuss how to move forward in the time of AI.
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CFO Editorial Staff. (2024, August 12). Layoffs at Dell and possibly Cisco raise concerns about job market and AI: Trial Balance. CFO. Retrieved from https://www.cfo.com/news/layoffs-at-dell-and-possibly-cisco-raise-concerns-about-job-market-and-ai/723839/
Shetti, U., & Mukherjee, S. (2024, August 10). Exclusive: Cisco to lay off thousands more in second job cut this year. Reuters. Retrieved from https://www.reuters.com/technology/cisco-lay-off-thousands-more-second-job-cut-this-year-sources-say-2024-08-09/
Thompson, P. (2024, August 7). Dell is making more layoffs to become ‘leaner’ amid its ‘modernization’. Business Insider. https://www.businessinsider.com/dell-layoffs-sales-workers-restructuring-process-csg-ai-modernization-2024-8
Vaughan, S. (2024, April 4). Is AI driving tech layoffs?. Computerworld. Retrieved August 22, 2024, from https://www.computerworld.com/article/2077751/is-ai-driving-tech-layoffs.html
