Dell Technologies laid off approximately 11,000 people in fiscal 2026, decreasing their total employee count by about 10%, and bringing the number of employees to around 97,000 as of January 31, 2026. The company said these cuts were part of a careful plan to save money and generally update the business, as explained in their yearly 10-K report.
Scope of the workforce reductions
These newest cuts are similar to those in previous years, and mean Dell now has 27% fewer employees than it did in fiscal year 2023. The number of workers went from around 133,000 in 2023 to 120,000 in 2024, then to 108,000 in 2025, and now to approximately 97,000 in 2026.
Dell is calling these changes "employee reorganizations” and limiting how many new people they hire, so that their investments match their important goals. The company says they’re continuing to focus on the people who work with customers and areas that are growing quickly, while getting rid of positions that don’t fit with their plans.
Severance costs and cash impact
Dell spent around $569 million on severance pay in fiscal tthe year 2026, which is down from about $693 million the year before. This drop suggests the biggest changes are slowing down, even though the company is still very careful about costs.
Leaders at Dell are describing this spending as a way to make the workforce and the way the company works more efficient and in line with what they want to achieve in the long run. At the same time, Dell has been giving more money back to shareholders through a bigger dividend and buying back more of their own stock, which shows they’re confident in their cash flow despite having fewer people on the payroll.
AI-driven strategy and investment focus
Even though they’re reducing the number of people working there, Dell is still trying to be a major provider of servers designed for AI and the large computer systems businesses use. They expect to double their income from AI servers by fiscal log year 2027, showing they are moving toward more powerful computing and data center solutions.
This change in strategy explains the combination of two things: investing a lot of money in expensive, high-profit AI hardware, and cutting jobs in areas that aren’t as central to the company. Dell has said they will limit hiring new employees, and instead move resources to the groups and projects that support their AI and cloud plans.
Context within the broader tech sector
Dell’s layoffs are happening for the same reasons as those at other companies in the tech industry: managing costs and changing structure as they refocus on AI and their core businesses. Many tech companies have cut payrolls in 2026, and services that track this have reported tens of thousands of jobs lost at dozens of companies this year.
Many major tech companies have announced or are said to be planning significant cuts in the workforce as they move their budgets toward AI development, cloud services, and other important areas. This shows how quickly changes in what people want and where companies are investing are changing who gets employed in the tech industry.
Implications for workers and the labor market
All these layoffs make people wonder about giving employees new skills and how the job market will adapt. Companies say that AI will automate many basic tasks, but will also create the need for people with new abilities in engineering, data science, and operating cloud systems.
For the employees who have lost their jobs, the most important things now are severance pay, help with the transition, and chances to get retraining. For people who make policies and teachers, this trend shows we need to quickly improve programs for upgrading skills, so workers can get into the new jobs that AI and high-performance computing will bring about.
Outlook and strategic tradeoffs
Dell’s many years of reducing the number of employees shows a deliberate attempt to balance saving money and returning money to shareholders with greatly increasing investments in AI infrastructure, because leaders believe this is where growth will come from. If demand for things powered by AI turns out as expected, the company may be able to stop hiring in certain areas, even while keeping the overall number of employees lower.
Investors have responded well to Dell’s plans for giving money back and for AI. However, it will take time to see if the company can continue to increase its income from AI servers while dealing with the effects on people and the way the company operates that come with having a smaller workforce.
