by Wolf Richter, Wolf Street:
Trying to find efficiencies and synergies to save $1.7 billion.
The ink was barely dry on Dell’s acquisition of EMC, the largest technology deal ever, valued at $67 billion when it was announced in October last year – and already the layoff rumors are oozing from the woodwork.
“People familiar with the company’s plans” told Bloomberg that Dell will cut 2,000 to 3,000 jobs.
Dell spokesman Dave Farmer refused to comment specifically on the report on Thursday but said instead, as sort of a confirmation: “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.”
On Wednesday, the day the deal closed, CEO Michael Dell gave some clues in an interview: “There are some overlapping functions and that sort of thing – that’s not the primary feature of this, but there is some of that.”
These “overlaps” or “overlapping functions” are terms in corporate speak for real people, and these real people are mostly working in the US, according to the report: supply chain, marketing, and general and administrative positions.
Dell is trying to find some efficiencies and synergies to save about $1.7 billion in the first 18 months after the deal closes, so starting from Wednesday. They’re not dilly-dallying around cutting costs and laying off people.
Combined they have about 140,000 employees. So the trimming might have a long ways to go, especially if the cloud and the Internet of Things are not as fun as imagined. But that doesn’t mean that the headcount will come down – they’re bringing in foreign workers, mostly from India.
These are just applications. Not all of them will be certified, and of those that are certified, not all beneficiaries will be hired. But the data for 2016 isn’t complete yet either.
It’s the hot thing to do for tech companies: laying off existing workers in the US, and bringing it foreign workers on H-1B visas. The Senate has been looking into some of the abuses. In February, Senator Richard Blumenthal (D-Conn.) sent US Attorney General Loretta Lynch a letter requesting a Justice Department investigation. But the tech lobby will likely get the Senate back on track soon.
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