Dell workforce shrinks again in FY26, AI strategy drives layoffs and hiring slowdown: Report

Dell Technologies reduced its global workforce by about 10%, or nearly 11,000 employees, in fiscal year 2026, according to its annual report released on Monday, 16 March, as per a report.

The company had around 97,000 employees as of 31 January, down from approximately 108,000 a year earlier, Reuters said. This follows a similar decline of about 10% in fiscal 2025, indicating a sustained trend of workforce reduction.

Cost-cutting through limited hiring

The layoffs reflect Dell’s strategy to limit external hiring as it reportedly focuses on cost control while investing in high-growth areas such as artificial intelligence.

The company spent $569 million on severance payments during the period, down from $693 million a year earlier, according to the news agency, suggesting a gradual easing of restructuring costs.

AI server business drives growth outlook

Despite workforce cuts, Dell remains bullish on its AI-driven business.

The company said last month it expects revenue from its AI-optimized servers segment to double by fiscal 2027, highlighting a shift toward high-performance computing and enterprise AI infrastructure.

Shareholder returns get a boost

In February, Dell announced a 20% increase in its cash dividend and authorized an additional $10 billion for its share buyback programme.

The company’s shares have risen more than 24% so far this year, reflecting investor optimism around its AI strategy.

Wider tech layoffs signal industry shift

Concerns over AI-driven disruption are growing across Silicon Valley. According to Layoffs.fyi, more than 60 tech companies have cut over 38,000 jobs so far this year.

Meanwhile, Meta Platforms is reportedly planning a major round of layoffs that could impact 20% or more of its workforce, underscoring broader industry restructuring.

(With Reuters inputs)