Dell Cuts Workforce 10% for Third Year, Sees $569M Severance Charge
Dell’s headcount fell 10.2% to 97,000 employees as of Jan. 30, marking a third straight year of 10% reductions driven by reorganizations and hiring freezes. Fiscal 2026 severance charges totaled $569 million, down from $693 million in 2025, while AI-optimized server revenue is forecast to double by 2027.
1. Workforce Reduction Trends
Dell’s employee count declined from 133,000 in fiscal 2023 to 97,000 as of Jan. 30, reflecting annual cuts of roughly 10% over three consecutive years. The latest 10.2% reduction followed a 9.8% drop in 2024 and another 10% cut in 2025.
2. Cost-Cutting Measures and Severance Charges
The company recorded $569 million in severance charges for fiscal 2026, compared with $693 million in 2025 and $648 million in 2024. Most of these costs were allocated to selling, general and administrative functions, with smaller impacts on revenue-related and R&D expenses.
3. AI Integration and Revenue Outlook
Dell continues integrating AI and machine learning across IT management and software solutions, deploying specialized servers to support these workloads. Management expects revenue from AI-optimized server orders to double by 2027 as demand for advanced compute capacity accelerates.