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Dell could slice up to 3,000 jobs after its acquisition of EMC a week ago. The $67bn merger, one of the biggest in innovation history, saw EMC taken over by Dell to make an association of 140,000 workers around the world. Dell plans to spare $1.7bn expenses int the following year and a half and also to expand sales over that period.
"As is common with deals of this size, there will be some overlaps we will need to manage and where some employee reduction will occur," Dell spokesperson Dave Farmer told Bloomberg. "We will do everything possible to minimize the impact on jobs. We expect revenue gains will outweigh any cost savings, and revenue growth drives employment growth." Most of the expected 2,000 to 3,000 redundancies will be made in the US and will effect marketing, supply chain and general administrative workers, according to Reuters.
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Dell went private in 2013 when founder Michael Dell put up his own cash, in partnership with private equity firm Silver Lake Partners, to purchase the firm. Part of the financing for the EMC deal will originate from the offer of some of its software and hardware resources, for example, the SonicWALL firewall division, which is soon going to divided in a separate venture, and Dell's software unit, which is being sold to buyout firm Francisco Partners Management LLC and private equity interests. Much of the EMC's worth, in the mean time, is tied up in its controlling stake in virtualisation software supplier VMware.
Like its opponent HP, which split into separate software and hardware organizations a year ago, Dell has been hit hard by the contracting PC market and the rise of cloud vendors. Before the deal, EMC had been battling with weak development of its own. The plan is that the new organization will concentrate converged infrastructure and incorporated stages for the cloud. In any case, if sales don't increase, more layoffs are likely.
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