Dell swings layoffs axe at 3,000 EMC people

Dell is to trim the workforce following its $60bn-plus buy of storage titan EMC, with between 2,000 to 3,000 heads expected to roll. But if sales don’t track to management expectations, sources told us to expect more. A Bloomberg report claimed Dell will seek out $1.7bn in cost savings in the next eighteen months – but it will …

[phands]

What's the ROI time on $67Billion?

This job cut is hardly surprising....but it's also a token gesture. How long will it take for a $67B investment to pay off, never mind turn a profit? Slicing off 3000 people to save under $2B means very little, except that they have no idea how make this whole thing profitable. It's going to a mess.

If EMC revenue remain in the $20 - 25Billion range they've been in, then it will be at least 3 to 4 years before this is profitable....but revenues were slowing....I think there's going to a be a lot more job cuts.

[Anonymous Coward]

Re: What's the ROI time on $67Billion?

Especially when it is $67 billion, or a large part of it, in debt and the meter is running on the juice. The annual interest the combined entity is going to have to pay, just to get to square one, is probably around $4 billion.

This whole thing could unravel pretty quickly if Dell starts cutting EMC in large numbers and tries to take over the org. Others will leave of their own accord. That is usually what happens with these acquisitions.

[Charlie Clark]

Believe it you like

A Bloomberg report claimed Dell will seek out $1.7bn in cost savings in the next eighteen months – but it will seek to beef up sales by several times that amount, minimising the need to thin out more.

Cut $1.7bn and magically make more than from sales? Ain't gonna happen. Sorry for all the people getting the chop but we all knew this was going to happen. Dell took on far more debt than the deal can afford. But, since it got voted through, it's been Crystal Champagne and speedballs all round for the money men who hatched the taxpayer-financed scheme.

My prediction: will seek to beef up layouffs by several times that amount when sales don't meet their impossible targets as customers somehow reject price hikes and start buying straight from the Chinese, or Taiwanese to avoid problems with import restrictions.

[quxinot]

Re: Believe it you like

I doubt anyone with two functioning brain cells to bash together was surprised by this happening.

But I also suspect you're doom-mongering more than is absolutely necessary. This isn't Microsoft! It'll take a good few years before the shine is replaced with grime, and even then, some sparkle may pop up in other products.

But it really makes me wonder sometimes: How many job cuts could be prevented by cutting bonuses at the C-level? Not all of them, assuredly, and yet a good number of working people would retain their employment.

Of course, we all want to see this go the other way. Walk some executives to the door, and spread the bonus on the peons. Just once.

[Anonymous Coward]

Re: Believe it you like

You have to think that the EMC management and employees are not too happy about being told what is what from Dell's management. EMC was the more successful company. Dell just leveraged themselves to the hilt to make the acquisition. If they were smart, they would have put EMC in charge of the combined company (below Michael Dell on the org chart). Instead they decided to call it "Dell Technologies" and are apparently calling the shots.

[ecofeco]

Re: Believe it you like

As I've said before, most M&As these days always seem to be the incompetent company trying to buy themselves a clue (a competent company) and end up just killing it.

[Charlie Clark]

Re: Believe it you like

But I also suspect you're doom-mongering more than is absolutely necessary. This isn't Microsoft! It'll take a good few years before the shine is replaced with grime, and even then, some sparkle may pop up in other products.

It certainly isn't Microsoft: even if it has a terrible track record when it comes to how it integrates acquisitions, at least Microsoft could afford to buy the companies with cash. Dell, which also has a poor track record of acquisitions, has loaded up massively on debt to pay for this including issuing 30 year bonds with 8% yields, which will be paid from those yet be seen profits. This is completely unsustainable so debt and company restructuring is inevitable. The pressure to sell stuff (VMWare) off or close it down (lots of hardware) will be immense.

[Anonymous Coward]

Re: Believe it you like

One of the big mistakes they made was to call this combined company Dell (Technologies). The customer base they want to retain are the EMC, VBlock, VMware customers... PC customers and Dell server customers are not nearly as important. There will be more than a few companies that are not going to like that Dell is now their enterprise infrastructure provider, and it makes it seem as though there will be big changes (they are now buying Dell, not EMC, VMware). They should have just retained the branding... probably hubris on Michael Dell's part though, not wanting to recognize that his namesake company is synonymous with low innovation, not enterprise grade.

[chivo243]

Out the front door

and most cases in the side door as contractors. No benefits to pay, that's a chunk of change for Dell to be saving. Move the contractor's salary to another column on the ledger, done and dusted.

And in the end, the deal is done, sink or swim.

[Charlie Clark]

Re: Out the front door

That may be what they hope to do but that strategy often backfires.

[Anonymous Coward]

Dell is no Perot

Used to do a lot of work with Perot Systems here in DFW. So both Dell and Perot are Texans. Daddy Perot was all about "how it should be." He famously had everyone at his sites wear suits and the security all would wear guns. Dell took over, everyone was wearing jeans and flip-flops, I was let go, and he lost about 10 million a year in government contracts. I expect the same to happen to EMC but with more BANG!

[ecofeco]

Re: Dell is no Perot

Yep. Have an upvote.

[ecofeco]

No matter what they say

If you are the buyee and not the buyer, you will always lose your job no matter what they say.

[Anonymous Coward]

short version:

"we are going to get rid of workers to save money (and scare the hell out of the ones left). For the ones left, we are going to work and worry you to death, your workload will now be double, triple, quadruple in order to make us as much money as possible, and then get rid of your asses later, blaming it on you, while we reap the rewards of all your hard work. Thank you, that is all."

[Destroy All Monsters]

Being there, doing that.

Not a DELLMC, elsewhere...

[SomeoneInDelaware]

BOHICA.

Customers should start to consider their SAN/NAS exit strategies, just in case.

[unredeemed]

Oh hey, the sky is falling, they are laying off 2% of their workforce! OMG, must not buy Dell or EMC stuff ever....

This is what IBM does almost monthly. HPE is no different.

redundant folks are always found during mergers and acquisitions. Get over it, it's a large corporation, not a charity.

[ecofeco]

Considering the trillions of dollars of subsidies and tax breaks many U.S. businesses receive, yes, they are charities and greedy, psychopathic whiny baby ones at that.

[Charlie Clark]

As the deal is entirely funded by debt, which has already led to some massively tax efficient payouts, it could be argued that it is a charity.

Anyway, watch that 2 % become something closer to 20 %.

[Dwarf]

Some change is good

Good to see Quest popping out the far end. Hopefully VMWare will follow soon.

Personally, I don't care about Dell or EMC. I never recommend products from either of them as other vendors are far better.

Dell because their products management products wouldn't reliably detect hardware issues - even when you get their tech's involved, without this how can I guarantee to meet the availability requirements ?.

EMC because they just try to climb the management ladder in the organisation and cut out the technical staff, so little things like requirements get swapped for all sorts of promises that rarely work out in practice.

[Anonymous Coward]

Re: Some change is good

There is no way VMware will pop out. VMware is the crown jewel of the entire acquisition. They were not paying $67 billion to get their hands on legacy EMC storage.

[Anonymous Coward]

Re: Some change is good

I don't know what you're talking about - your information is many years out of date.

I work for a company that sells many brands of technology to customers in both public and corporate space: Dell has the best build and deployment model on both servers and client.

Their client products are simple and straight forward to maintain images on. I've worked on other brands and although the build quality is there on some, the maintenance cycle is much more time consuming, which is a significant factor for the business world.

When it comes to the servers, they have excellent support (significantly better than two competitors I will not name) and the auto proactive response (call home) for failing components is straight forward to utilize. They just work.

And their systems management tools are much more simplified over what Cisco offers - and significantly less expensive than the HP Oneview suite.

EMC has its challenges, but their products deliver and EMC has always stood behind them, which is why they continue to be number 1 in the business. I have every expectation that this will continue, seeing how they have put key EMC people in charge of critical business lines.

I haven't digested the vmware implications yet...more to come, I suspect.

[Jay 2]

Re: Some change is good

I've been using Dell servers for quite a few years now, and haven't had too many problems with them. I have small gripes over the flaky iDRACs and firmware, but nothing too major. For slightly less time I've also been using HP servers, also with no major problems.

Though Dell consumer kit is a different matter. That I wouldn't touch with a bargepole!

[Medixstiff]

Dell needs to be careful and look at how IBM and HP have gone the last decade with their buyouts and cost cutting.

Don't be fools, the workers do 95% of the work, the Mangler's are only there to make the harder decisions that need sign-off and to take responsibility - yeah right - for some of the decision making process.

[s. pam]

Having worked in Michael's "flock"

If it's cheap as hell it's gotta be Dell was our motto in Dell Engineering. That attitude percolated right up to the top.

EMC staff should be worried.

[Anonymous Coward]

I worked in both companies, and saw the stark differences...

I worked 12 hours/day @ Dell factory integration, and nothing was introduced to slow down "getting the job done". I was there when they decided to squeeze pennies out of the optiplex line on cheap Korean capacitors, only for their GX systems to die about 14 months into service...massive failure rates, irate customers, but one side of the business (supply chain) continued to clap a job well done....hilarious.

I loved working in EMC, hard but quality everything - the environment, the culture, the service....i would argue that customers bought EMC not because it was cheaper, rarely was, but the customer service was outstanding. As a Tech2 for years, i saw the effort and expense made every day to keep customers running.

Go Big = a Massive Risk

or

Go Home = about 3,000 employees...and more to come no doubt.

I wish my ex-colleagues and friends the best, they've known the best, and it's going to be damned hard for Dell to match that, but the important thing is that Dell try, at least.

The Storage race to the bottom was truly begun.