Dell lays off 12,500 people | Hacker News Reader

Dell lays off 12,500 people

theregister.com

140 pointsroonilwaslib95 comments

Feels like we are about to get a new wave of large layoffs. Things like Intel last week and Berkshire Hathaway sells off... Brace for impact!

Dell is directly downstream of Intel. Generations of servers typically match the cadence of a CPU generation.

Why do recent layoff often need to attach something with AI? Few companies have even found a solid revenue model or recurring paying customers.

I can only guess but saying layoff because of AI sounds better than « layoff » (because of mismanagement)?

Yeah, it probably is an attempt to hide the blood in the water. They tell their competitors they aren't weak, they've just found a way to be more efficient through the use of AI. And sure maybe a couple hundred folks were replaced by some streamlined AI tooling but this is a ridiculous amount of folks to replace with AI, if it were true.

So yeah, AI. Inflation. Overhiring during the pandemic. Supply chain issues. All the usual excuses to never admit mismanagement.

China’s collapsing economy (30% of the world gdp) is also having an impact.

Even if (as you should) you dispute their exact growth figures, China's economy is not collapsing.

It’s collapsing relative to the assumptions people made about growth. FDIC is down nearly 10x.

Wow, this feels like a middle finger on the way out the door:

> Severance for most will likely involve a payout of two months wages plus a week per year served up to a max of 26 weeks

A week per year of service?

That's actually pretty good and how it's calculated in France when you're fired (beside the "notice" period, which would more or less match the two months here in Dell annoncement): https://www.service-public.fr/particuliers/vosdroits/F987 , and similar to what other countries here are doing.

1/4 of a month per year served up to 10 years, and 1/3 of a month per year served after the first 10 years

I'm of course ignoring the whole cause of layoff, which in France is very different and can lead to majoration or to straight up remove the severance, and also here unless you're someone with years on the job the paid holidays severance is usually the largest part of the amount you get and I don't think the US has an equivalent.

That's .... pretty damn good, actually.

2 months is already way above "average" and adding weeks per year is ... nice.

US law generally requires either 60 days notice of a mass layoff or 60 days pay in lieu of advance notice.

So 2 months pay for an immediate termination isn't generous, it's legally required.

However, the additional severance 1x week pay/year is generous in comparison to other companies conducting layoffs of this size.

The 2 months is pretty standard for white collar corporate mass layoffs to cover the 60 day WARN notice requirement, since most corps just opt to sever people immediately and pay out the required notice period. For blue collar work it's typically more usual to make them work thru the notice period and offer retention bonuses.

Grading exit packages on a curve instead of what workers deserve only carries water for Dell and sets an ever lower bar for every subsequent round of layoffs.

Okay, how should it be graded? What's preventing me for arbitrarily choosing a number like 100 months? Averages might not be perfect, but at least everyone can agree on it.

You can choose 100 months then advocate your position on its merits, if you like. This is a political question, a contest of power and resources, not a math problem. Scaling severance to be proportionate to the average period of unemployment at the time of firing would ensure the company doing the layoff would bear their share of the societal burden of unemployment they are helping to create.

>You can choose 100 months then advocate your position on its merits, if you like

You certainly didn't bother to do that, and "2 months is generous because it's above average" might be a lazy argument and perpetuates the status quo, but it's certainly orders of magnitude better than no argument.

Your system of averaging employer input means that exclusively employers comprise a virtual senate for all matters severance and the corresponding employment they create.

Any proposal that considers opinion and interests beyond businesses’ is already more even handed than your proposal.

When I got laid off from GE I received a severance and bonus. They trained me on how to apply for unemployment so that my severance wasn't calculated. So I got unemployment and was able to bank my entire severance. If you follow the instructions without the help of legal advice your unemployment starts when the severance runs out.

Who decides "what workers deserve" ?

The way I see it, if you want something fair it can't be solely the worker nor solely the employer.

And the governement would be too easy to be pushed too far one way or the other, depending on political climate.

Which is why unions should be pushed more, so employers and employee can negotiate than on equal terms (and not employer versus single employee).

Not american, and that's how it is here, and frankly it's not perfect but it seems a lot better than hope your employer has some decency to give you breadcrumbs and if not oh well tough luck.

Presently Dell singularly decides without input from labor or the government

I am absolutely aware, which is why I'm asking you who you think should decide in this case ?

Government has a say by creating legal framework governing how layoffs work.

They opted for at will employment which means they almost universally defer to business in practice.

Can you recommend any companies I can apply to with an option to “opt” for just-cause employment? Would be very impressed if you could list any companies offering “just-cause” employment with >=12,500 employees that these laid-off employees could have “opted” for.

Or does that not exist?

At first glance, it seems equivalent to “well, they opted to work on planet Earth”, with the implication that they could have opted to work on the moon or Mars or the ISS - as in, for the most part those options don’t actually exist, and where they do, there are a very limited number of jobs available (on the ISS), so that in fact not all of the 12,500 people could have opted to work there.

Although, look at it like a retroactive inflation adjusted 2% raise for every year up to 26 that you worked at Dell.

Dell doesn't _have_ to offer much of anything although in my experience the 1 week per year of tenure on top of a fixed payout is fairly common.

For a 26 year employee, that's a total of 8 months of pay which is plenty of time to find a new job - assuming you have valuable skills to contribute and haven't just been coasting for years and not keeping your industry skills up to date. If one can't find a job in six months that is similar to their now defunct job, they probably won't and likely need to adjust their expectations.

That's on top of "two months wages" base, which is already pretty generous. I'm not sure what you're expecting here? 2 months base + 1 month per year?

don't think 2 months is generous

What's your baseline and where are you getting it? At least compared to the statutorily mandated amount of 0 days, and what companies typically give out (eg. 1-2 months), it's pretty good.

> At least compared to the statutorily mandated amount of 0 days

For a mass layoff, the statutorily mandated minimum amount is actually 2 months.

Fair or not, a week per year is an extremely common formula for calculating severance at a large company

This varies a lot between cultures and jurisdictions obviously. But not even half of Dells emplyees are in the US, so presumably a large chunk of these layoffs will be elsewhere.

Meanwhile, the CEO is estimated to be worth 90B.

Welcome to America. As you can see from all the replies here, employee exploitation is not just the norm, it's expected.

As you can see people are even thankful for it!

Welcome to America, where companies know they can fire easily so they hire easily. Strong competition between employers benefits employees. That is why salaries in the USA are so much higher than those in Europe. But hey, at least we’re not “exploited” here in the old EU. We're just being paid peanuts…

That's poor, when I was in financial services there were three rounds of layoffs in 10 years. The payout was notice period and 6 weeks per year capped at two years salary. Some people I know were on three months notice and had 15 years service.

Wow what were you expecting? A year per year of service?

Even the two months sounds pretty good to me.

Seriously curious, what is your point of reference that makes this look bad?

I assume most of these are salesmen and support people ? It says they have 120k people on staff, but do they have a clearer picture on the various divisions inside ?

Nothing like getting the boot to help fund the next yacht

US corporations have become so large, they have started to function internally not unlike the fully fledged managed economies of the USSR. A bunch of MBAs acting as petty dictators hiring and firing at will, driven by nothing more than a few financial indicators and their intuition, i.e. they are making it up as they go, just like Stalin and Mao were doing back then.

To support your point, this is quite literally a part of a move to decrease them from 120k to 100k employees. Who decided those arbitrary numbers, and that 100k (not 105, not 95) was the goal needed for the best interest of the company, while not even linking it to specific division within it ? Clearly not someone in touch with the day to day and nitty gritty. Not because that number is good (or not), I don't know Dell enough for that. but because that number is too round, too perfect, to be anything else than a spreadsheet result, though displayed in a "Business Intelligence" suite of course. I'm sure the guy even had a great tie.

I understand it makes sense financially and that once companies become that big they are essentially playing two game (what they do game, with the workers, and what they're worth game, with the investors), but this really doesn't help with the dissociation more and more people are feeling between the stock market / modern management of companies by mba on one side, and their "real" every day live on the other.

I'm very lucky to be well off enough to not have to worry about things like that anymore, but I can't imagine the rage you must feel when fired not because you made a mistake, or are bad, or your project failed, or your division is doing poorly, or your company is, but because someone decided the employee ticker must reach that number, and now if it's not done the market will decide it's a failure, so you won the inverse lottery.

> but because that number is too round, too perfect

Because it's an external estimate. From the article:

"That number has been guesstimated at around ten percent of the workforce – about 12,500 people – as part of an effort to get the overall workforce from 120,000 to below 100,000."

>while not even linking it to specific division within

there's no indication that they decided to cut 10% (or whatever) evenly across all divisions. The only thing we do know is that the overall reduction is 10%.

This comment matches my experience of two big tech corps. It almost feels exactly like the Soviet bureaucracy described in the book "Red Plenty". The amount of work being done is just far low compared to a small company and the gravy train is huge. The goal is to show activity not results. Nobody wants to talk about results but activity. Internal departments have de facto monopoly over their domains regardless of how shitty they are, and you need to do soviet style bartering to get what you need.

>US corporations have become so large, they have started to function internally not unlike the fully fledged managed economies of the USSR

The important difference you're missing is that unlike china or the USSR, there are competitors you can jump ship to (eg. Lenovo or HP), and Dell can't send you to the gulag for disagreeing with them.

While a nice meme, it doesn't at all take away from the point that many large companies operate like planned economies, ee for example Walmart: https://www.versobooks.com/en-ca/products/636-the-people-s-r...)

But they can deny you severance payments if you say anything bad about them. Not all companies do this, but enough that it makes the analogy to China or the USSR more appropriate

How is "you're denied payments voluntarily made to you" anywhere close to "you get sent to the gulag"?

no. anti-disparagement clauses in severance agreements are illegal.

Thank you for pointing out my error.

"The National Labor Relations Board (“NLRB” or the “Board”) held in a February 2023 decision, McLaren Macomb, 372 NLRB 58 (2023), that the “mere proffer” of a severance agreement which conditions receipt of benefits upon forfeiture of protected rights under the NLRA constitutes an unfair labor practice."

https://www.americanbar.org/groups/labor_law/publications/la...

You couldn't easily fire in USSR, not a good analogy.

US corps look more like feudal kingdoms of the middle ages with serfs.

I don't think they could fire serfs that easily either

Remember, in a capitalist democracy the only organization that is not democratic is the corporation.

This is one of those moments people tell you 'not to feed the trolls', but if you ignore them, they have a platform to spew nonsense.

Reddit is far worse than HN, and no one has time to correct all the anarchist teens.

So the return to office mandate to decrease staff numbers weren’t enough and avoiding severance pay wasn’t enough then?

This is all about stock price and sucks to be dell since the price is still falling at this point.

This gotta be some sort of world record numbers. 3-4 Large factories amount of people.

Vesting schedules are a damn joke these days. Who stays at a company for five-plus years? People would, but they get run off by extreme boredom, garbage managers and layoffs.

I don't consider anything that requires vesting a positive.

https://www.bls.gov/news.release/jolts.t04.htm

The quits rate in May 2024 is 2.1%. If we assume quits are uniformly distributed, then the probability of staying in one job for greater than 5 years is 28.0%. That means 5 years is above-average tenure, but nowhere near enough to justify a statement like "Who stays at a company for five-plus years?". Not everyone is a serial job hopper that changes jobs every year.

hey the economy is doing great, what you are feeling is a "vibecession". Don't look at the hundreds of thousands of tech employees fired in the past 2 years.

Dell's employee number grew from 105,000 in 2017 to peak level of 165,000 in 2020, before going down to the current level of 130,000 - [0]

But are you saying we should only pay attention when layoff happens, ignoring a long period of significant growth?

[0] - https://www.statista.com/statistics/264917/number-of-employe...

Tech hired way more than any other sector during the pandemic, and is now reverting to the mean. It sucks for us but means little about the broader economy.

I've been hearing this for the last 2 years. How many more layoffs until we touch the baseline?

if you look at the data, big tech employment grew a ton 2019-2022 and has been flat since.

the layoffs are just a way to clean house while remaining roughly the same size.

This is far from just affecting tech. Good luck getting a job with any other STEM or finance/admin degree.

except I know so many out of work that are not in tech. Finance is getting destroyed right now, also media, learning and pharma. Govt jobs and travel jobs lost during covid seem like the only thing thats out there. The economy is absolute garbage right now and the media has been gaslighting everyone saying its all in our heads.

It's really interesting how different the job market is across countries. Unemployment in Denmark is still really low (2.9% [1]) of the top of my head I can't think of a single industry that isn't still hiring, except there's no one to hire.

I'd really like to know why there's such a huge different between e.g. the US, UK and Denmark. It may have to do with declining population in Denmark. Or maybe US companies over-hired, because they could, but those people would have had to go somewhere else.

[1] https://www.dst.dk/da/Statistik/emner/arbejde-og-indkomst/be...

An unfortunate truth about large tech companies is the amount of fluff on payroll. Layoffs are often just a basic cleansing.

A gentle reminder that the "fluff" is people.

"Fluff" refers to the role. Ideally those people could be moved around to non-"fluffy" roles, but that's not always possible. Losing one's job is always a blow to one's dignity, and ultimately it may be better for those companies not to create those roles to begin with (of course, sometimes roles aren't fluffy when they are created, but become that way over time, eg, pandemic hiring). The truth is we have to have both eyes open when it comes to the value our roles provide to the company that hired us, and plan accordingly.

>Don't look at the hundreds of thousands of tech employees fired in the past 2 years.

I can't tell whether this is satire. What you're describing is exactly how economy-wide metrics are supposed to work. People quoting them aren't claiming that it's sunshine and rainbows for everyone, just that for the entire economy as a whole (ie. for the average worker), things are going pretty well right now.

"a recession is when your neighbor loses his job; a depression is when you lose yours"

[dupe]

Actual article: https://www.bloomberg.com/news/articles/2024-08-05/dell-layo...

(https://news.ycombinator.com/item?id=41166865)

kudos for giving out an actual number of humans fired.

instead of the usual, de-humanizing percent of employees usually given

Percentages may be "de-humanizing" but they are much better for understanding the relevance and severity of layoffs. If your local bakery lets 20 people go it's much more likely to be a sign of significant issues with the business than if Apple lays off twenty people (which wouldn't even be news).

In fact, when reading news stories you should _always_ look for the denominator (and be on guard when it isn't provided), lest you be mislead by emotionally framed numbers floating in the void.

I kind of wish they did both... percentages are more helpful in understanding the impact (in this case to the company). But you're right in the case of layoffs a count is more meaningful... although i'd argue whether it's 1 or more the impact to the individual is the same and usually very negative.

The article says this is an estimate based on an "about 10%" figure:

> Implied was that they would be doing this without the help of an undisclosed number of newly former employees. That number has been guesstimated at around ten percent of the workforce – about 12,500 people – as part of an effort to get the overall workforce from 120,000 to below 100,000.

Depends on who they're talking to.

For press release or to investors, the percent is the number that matters.

To the internal communication to the employee losing their jobs or those that have to keep the torch going, the number is usually better.

With that said, seems like it's part of a larger downsizing plan: "That number has been guesstimated at around ten percent of the workforce – about 12,500 people – as part of an effort to get the overall workforce from 120,000 to below 100,000."

Note that these are layoffs not firings. The fault is with the employer, not the employee, and exit packages generally reflect this.

It largely doesn’t matter to most people. It’s a gap.

When an employer has a choice, they almost always take the gapless candidate.

A semantic difference only. They were "made redundant", "let go", "laid off", "fired", "terminated", and any other set of convenient choices.

The first 3 give severance, the last two do not.

There is an enormous difference.

Not so. Being included in a RIF (reduction in force) is legally different than getting fired. Ask anyone who knows anything about corporate HR.

I'm not finding any legal difference in the US. What difference do you know of?

If you're fired with cause, no severance, else, severance. It is quite common knowledge.

This may be convention, but it is not law. No federal or state law requires severance pay in the US.

I didn't say it was law.

Unemployment insurance.

At least they didn't label the laid off employees as low performers like Intuit did.

How is a count more "humanizing" than a percentage? They're both numbers.

I agree. 10 is 10% of 100, 1,000,000 is 10% of 10,000,000. They're mathematically equivalent. Why do I care if it's 10 people, or 10,000,000 people, or if it's just quoted as 10%? These are all abstract numbers, numbers are not matters of humanity.

Layoffs lead to payoffs. Sorry for those of us who are not within a position of power and are affected by this. It's just another part of the neverending parabolic cycle..

Dell stock is currently down 3.68% today and has had no movement from the layoff announcement.

Clearly they need to lay off more employees.

I think it has been a short term financial bump, but long view investors are starting to see it as an indicator of future long term unhealthy performance. Either from self inflicted damage, or coming to terms with anticipated performance shortfalls.

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