The AI server puts pressure on the profit margin, Dell Technologies, Inc. Class C (DELL.US) will continue to wield the layoff axe.

Due to concerns that the recovery of personal computer demand is not as expected, and server sales profits optimized for artificial intelligence are lower than other products, Dell Technologies, Inc. Class C (DELL.US) will continue to lay off employees this year in an attempt to control costs. Dell Technologies, Inc. Class C stated that restrictions on external hiring, job reorganization, and other actions will lead to a continued decrease in total personnel by February 2025 fiscal year. The company is focusing on expanding its high-performance server business for artificial intelligence work. This growth momentum has excited investors, with the stock rising 39% by the end of trading on Tuesday and is set to join the S&P 500 index later this month. However, due to the expensive computer chips needed for servers produced by companies like NVIDIA Corporation (NVDA.US), there is increasing concern about the profit margins of Dell Technologies, Inc. Class C, Super Micro Computer, Inc. (SMCI.US), and HP Inc. (HPQ.US) in terms of device sales. In the most recent quarter, Dell Technologies, Inc. Class C stated that the increase in the proportion of artificial intelligence servers had a negative impact on profit margins, but there was some improvement in profit data compared to the previous quarter. The company's well-known personal computer sales business, which had been struggling for two years, did not recover as expected. On August 30, Dell Technologies, Inc. Class C reported second-quarter revenue of $12.4 billion, a 4% decrease from the same period last year, slightly below expectations. Sales of commercial personal computers remained almost unchanged, while revenue from consumer personal computers saw a 22% year-on-year decline. In a regulatory filing on Tuesday, Dell Technologies, Inc. Class C stated: "We remain committed to strict cost management to align with our ongoing business transformation plan, and will continue to take certain measures to reduce costs." The company declined to comment outside of the filing. In June of this year, Dell Technologies, Inc. Class C carried out layoffs mainly in the sales department, but did not disclose how many employees would be affected. The company recorded $328 million in severance costs in that quarter. Dell Technologies, Inc. Class C stated in February of this year that it has approximately 120,000 full-time employees globally.