Zhitong Financial APP learned that due to concerns that the recovery of personal computer demand is less than expected, and the sales profit of servers optimized for artificial intelligence is not as good as other products, Dell Technologies (DELL. US) will continue to lay off workers this year in an attempt to control costs. Dell said restrictions on external hiring, reshuffling and other actions will result in a "continued decrease in the total headcount" in the financial year ending February 2025.
The company is working to expand its sales of high-performance servers for AI work. Investors are excited by this new growth momentum, with the stock up 39% this year as of Tuesday's close and set to join the S&P 500 later this month. However, since the server requires Nvidia (NVDA. US) and other companies, and there are growing concerns about Dell and Supermicro Computer (SMCI. US) and Hewlett-Packard (HPQ. US) and other companies in the profitability of equipment sales. In the most recent quarter, Dell said that the increase in the proportion of AI servers hurt margins, although the profit figure for the quarter improved from the previous quarter. The company's better-known PC sales business has not recovered as expected after a two-year slump. On August 30, Dell reported revenue of $12.4 billion in the second fiscal quarter, down 4% from the same period last year, slightly lower than expected. Sales of commercial PCs were little changed, while revenue from consumer-facing PCs was down 22% year-over-year. "We remain committed to rigorous cost management in line with our ongoing business transformation plans and will continue to take certain steps to reduce costs," Dell said in a regulatory filing on Tuesday. The company declined to comment outside the filing. In June, Dell made layoffs, mostly in sales, but did not say how many employees would be affected. The company recorded $328 million in severance payments during the quarter. Dell said in February that it has about 120,000 full-time employees worldwide.
Source | Zhitong Finance
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