Dell announces continued workforce reductions amid margin pressure and AI server concerns.

👉 Key Highlights:

📍 Dell will continue workforce reductions into February 2025 to control costs.

📍 Focus on AI server sales excites investors but adds profitability pressures due to expensive chips.

📍 PC sales have not rebounded as expected, with 22% decline in consumer-oriented PCs.

📍 Dell's fiscal Q2 revenue was $12.4B, down 4% year-over-year, slightly missing estimates.

📍 Stock gained 39% this year and will join the S&P 500 this month.

📍 Job cuts included a $328M charge for severance in the June quarter.

👉 Context/Background:
Dell Technologies is set to continue reducing its workforce throughout 2024 and into early 2025 to maintain profitability. This decision comes as the company faces growing pressure on margins, particularly from AI server sales, which require costly components like Nvidia chips. Meanwhile, the PC market remains sluggish, with consumer sales declining significantly.