Dive Brief:
- Dell does not expect PC sales to rebound until later this year or early 2025, Vice Chairman and COO Jeffrey Clarke said Tuesday, speaking at a Goldman Sachs technology conference.
- “At the beginning of the year, I thought we'd be talking about a PC refresh,” Clarke said. “Today, we're struggling to even use the word refresh. It hasn't happened and I don't see it happening in the next weeks.”
- The company saw Client Solutions Group revenue decline 4% year over year to $12.4 billion during the three months ending Aug. 2 due to sluggish PC sales, according to a Q2 2025 earnings report. The slowdown was offset by a record $11.6 billion in revenue for the Infrastructure Solutions Group, a 38% year-over-year increase driven by server sales.
Dive Brief:
The emergence of AI-optimized PCs should add fuel to the next enterprise PC refresh cycle. But Dell hasn’t reaped the rewards just yet.
With overall revenue increasing just 9% year over year to $25 billion, the company tempered growth expectations as it carries out a business reorganization that includes cost management measures and layoffs.
“We remain committed to disciplined cost management in coordination with our ongoing business transformation initiatives and will continue to take certain measures to reduce costs, including limitation of external hiring, employee reorganizations, and other actions to align our investments with our strategic priorities and customer needs,” the company said in a Tuesday SEC filing. “We anticipate these actions will result in a continued reduction in our overall headcount.”
While Dell did not disclosed the number of positions it will eliminate, a spokesperson told CIO Dive said a reorganization process was underway in an email Thursday.
“Through a reorganization of our go-to-market teams and an ongoing series of actions, we are becoming a leaner company,” the spokesperson said. “We are combining teams and prioritizing where we invest across the company.”
Enterprises have been hesitant to invest in a new generation of higher-power PCs outfitted with neural processing units and graphics processing units for on-site generative AI applications, according to Gartner. PC shipments inched up in the second quarter but did not benefit from the AI bump the industry had hoped for, Gartner Director Analyst Mikako Kitagawa told CIO Dive in July.
While a major device refresh is expected, AI PCs may not play a major role, according to Forrester Principal Analyst Naveen Chhabra.
“Our recommendation to PC buyers is to go slow,” Chhabra said in an email. “Forrester does not believe firms will invest big time in AI PC’s in 2025 as firms are increasing their budgets just in line with inflation.”
However, Dell is well positioned to benefit from enterprises and cloud providers upgrading servers to beef up AI capacity, Scott Bickley, research practice lead at Info-Tech Research Group, told CIO Dive.
“As legacy server environments are displaced, the new GPU-powered and AI-accelerated hardware consumes exponentially more compute, networking bandwidth and storage,” Bickley said in an email. “Those services carry a premium price tag, and Dell is benefiting as they are uniquely positioned from a supply chain and customer service standpoint to deliver — and deliver fast.”
Dell sees server segment growth as a mix of the old and the new, Clarke said Tuesday.
“We think a consolidation is occurring — that you can consolidate older servers with newer servers and consume less space and consume less power.”
AI workloads are also driving some workloads back on-prem and into private cloud, Clarke said.
