On Wednesday, Dell Technologies completed its $63 billion acquisition of data storage giant EMC Corp.
On Thursday, media outlets began reporting that the newly combined company would cut 2,000 to 3,000 jobs.
Bloomberg news service -- citing unnamed sources -- reported that most of the cuts will come in the United States, in areas such as supply chain and general and administrative positions, as well as some marketing jobs. The combined new company employs 140,000 people worldwide and could have $74 billion in annual revenue, making it the largest privately owned tech company in the world.
Dell Technologies officials declined to comment specifically on the Bloomberg report. Company spokesman Jim Hahn said: "We expect revenue gains will outweigh any cost savings, and revenue growth drives employment growth. 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. We will do everything possible to minimize the impact on jobs."
Some tech industry analysts had previously predicted layoffs would follow the official combining of the two companies.
“As with all mergers and acquisitions, the biggest challenge will be to sort out redundancies,” analyst Patrick Moorhead with Austin-based Moor Insights and Strategy told the American-Statesman earlier this week.
Longer term, analysts said, Dell will start pruning its product lines, though that doesn’t mean Dell will play favorites and only eliminate or sell EMC-originated product lines or subsidiaries, analysts said. Dell products could be on the chopping block as well.
Round Rock-based Dell -- the largest private employer in Central Texas, with about 13,000 workers in the Austin area -- stunned the tech world last October by announcing that it was buying EMC Corp. The deal is part of Dell’s ongoing transformation from a PC maker to an IT powerhouse that sells computers, servers, storage and software primarily to corporate and government customers.
Also this week, Dell Technologies reported its financial results for its fiscal second quarter.
The company said it had revenue of $13.1 billion for the quarter, up 1 percent from the same quarter the previous fiscal year.
The company said it had a net loss from continuing operations of $264 million, compared with $292 million for the same quarter the previous year. Excluding certain items, Dell said its adjusted operating income rose to $752 million from $568 million.
"We executed well in the quarter driving $880 million in adjusted EBITDA, up 31 percent," Dell chief financial officer Tom Sweet said in a written statement. "Our second quarter results underscore our ability to consistently balance growth and profitability, and strategically invest in areas that will drive long-term profitable growth and strong cash flow."
News on Open Source is free and unlimited. Access to the rest of 512tech.com comes with an American-Statesman digital subscription, which also includes myStatesman.com and the ePaper edition. Subscribe at statesman.com/subscribe.