When Julius Caesar invaded Britain in 55 BC, he had no intention of turning back.
“If you want to take the island, burn the boats!” he declared, ordering his men to torch their only way of going home.
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The quote has also been attributed to, among others, the Spanish conquistador Hernán Cortés when he landed in Veracruz to begin his conquest in 1519. And it means destroying all possible ways of returning whence you came.
Moving on a few centuries and an employee at Dell (DELL) reportedly used that phrase to describe the company’s efforts to become leaner.
The tech company, which marks its 40th anniversary this year, is cutting an estimated 12,500 employees in the sales division, according to media reports, as it invests in a new group that will focus on artificial-intelligence products and services.
Employees said they were not surprised that the job cuts have started as the company begins its AI strategy, according to Business Insider.
Dell has been testing AI tools internally since October and is now putting the plan into action, applying AI across product development, content management, sales tools and customer service.
“I expected it,” said one laid-off sales employee whose team lost more than 60 people. “It’s a new quarter and they’re working on getting all support AI focused. I’d rather be let go with the package than quit.”
A Dell employee demonstrates features on an Inspiron 15 laptop during an event at a Curacao department store in Los Angeles on Wednesday, Aug. 7, 2013. Patrick T. Fallon/Bloomberg via Getty Images
Dell: ‘we continually evolve our business’
“The analogy being used is ‘we’re burning the boats,’ one employee said, according to Business Insider. The employee added that the situation was “a bit of a dumpster fire” with staff watching their inboxes for invitations to a meeting that could signal job cuts.
“This is horrible short term for morale,” the employee said. “I wouldn’t be surprised if it’s going to be in the dumpsters until the next Tell Dell or until we see third-quarter earnings.”
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Tell Dell is the computer giant’s annual employee engagement survey. In a statement, Dell said that “through a reorganization of our go-to-market teams and an ongoing series of actions, we are becoming a leaner company.”
“We are combining teams and prioritizing where we invest across the company,” the company said. “We continually evolve our business, so we’re set up to deliver the best innovation, value and service to our customers and partners.”
Dell employees aren’t the only ones worried about the impact of artificial intelligence on their jobs.
Goldman Sachs said in a report last year that AI could cause “significant disruption” in the labor market. As many as 300 million jobs worldwide — a figure close to the population of the U.S. — could be affected, the investment bank said.
Nearly three-quarters (71%) of employees in an EY survey released in December said they were concerned about AI. Nearly half of the respondents said they were more concerned about AI today than they were a year ago, and of those, 41% said it was evolving too quickly.
“Generative AI has evolved to one of the fastest user-adopted technologies, and as regulators and C-suite leaders struggle to keep up, it’s causing a sense of discontinuity, confusion, and even a loss of control among employees,” Dan Diasio, EY’s global artificial intelligence consulting leader, said in a statement.
“As businesses continue to adopt generative AI, leaders must keep employees at the center and help overcome fear-based barriers to usher in a new era of productivity and growth,” he said. (Generative AI uses machine learning to derive original content — text, images, video and more — from existing material.)
Report cites employees’ AI concerns
Fully three-quarters (75%) of employees in the EY study said they were concerned that AI would make certain jobs obsolete. About two-thirds said they were anxious about AI replacing their jobs.
However, an April report from Google (GOOGL) on the economic impact of generative AI, which can respond naturally to human conversation, said that “fears of large-scale technological unemployment are probably overblown.”
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“The history of general-purpose technologies shows that the growth they bring is accompanied by strong demand for labor,” the report said.
The study said that the “rapid changes brought by the spread of generative AI will require prompt and effective reskilling efforts.”
“These efforts will be able to draw on generative AI itself, a tool with unique ability to help people learn to use it better,” the study said.
Dell set to report Aug. 29
Dell reported first-quarter results in May, and during the earnings call, Jeff Clarke, vice chairman and chief operating office, said “we are uniquely positioned to help customers with artificial intelligence and our strong AI momentum continued in Q1.”
“We’ve seen an expansion in the number of enterprise customers buying AI solutions, which remains a significant opportunity for us given we are in the early stages of AI adoption,” he said.
For the quarter Dell earned $1.27 a share, compared with $1.31 a year earlier and beating the consensus estimate of $1.26 a share.
Revenue totaled $22.24 billion, up 6% year-over-year and beating Wall Street’s call for $21.64 billion. Dell guided for between $93.5 billion and $97.5 billion in sales for the full fiscal year.
Dell is scheduled to report second-quarter earnings on Aug. 29. Evercore ISI analyst Amit Daryanani lowered the investment firm’s price target on the company to $140 from $165 and affirmed an outperform rating on the shares, The Fly reported.
The analyst said he remained constructive on Dell. He said the July quarter and second-half setup remained favorable for IT hardware/networking companies, though those that are levered to networking will continue to face demand headwinds as customers digest prior investments.
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