Dell Technologies is temporarily halting employee pay raises, contributions to 401(k) retirement plans and hiring on a company-wide basis as the USUS$92 billion infrastructure leader joins the growing list of IT giants implementing measures to combat the financial turmoil from the COVID-19 pandemic.
The worldwide leader in storage, servers and hyperconverged infrastructure confirmed to CRN that it has frozen raises and external hiring for the remainder of its fiscal year, which ends Jan. 29, 2021. Dell has approximately 160,000 employees worldwide.
“Like all businesses right now, we’re constantly evaluating our business to plan for resiliency in the current environment and to support our team members, customers and community in a way that sets us all up for success on the other side of this pandemic,” said Dell in a statement to CRN.
Dell will also halt contributions to its employees’ 401(k) retirement plans starting June 1 until the end of the fiscal year due to economic concerns stemming from the coronavirus crisis.
Many IT giants and global market leaders have recently implemented temporary salary freezes or reductions as well as halting external hiring and 401(k) matching programs in the wake of the ongoing COVID-19 crisis.
Hewlett Packard Enterprise recently approved a plan to reduce salaries for HPE employees, including the executive team, from July 1 to Oct. 31. The salary reduction will vary based on the employee level, with the highest salary pay cut of 25 percent hitting the HPE executive team, including HPE CEO Antonio Neri.
Virtualization and hybrid cloud superstar VMware, which is majority-owned by Dell Technologies, conducted a company-wide employee salary freeze along with temporary salary reductions for top executives and VMware board members during its fiscal second quarter and third quarter. Additionally, VMware is halting 401(k) matches and switching from a semi-annual to annual bonus plan for its employees.
“We want VMware to be the best place to work in. So while we had to announce those COVID-19 measures, they’re not forever,” said Sanjay Poonen, chief operating officer at VMware in an interview with CRN. “We’ll examine them quarter-by-quarter, but we’re doing even more to invest in our employees.”
Last week, Dell Technologies founder and CEO Michael Dell said the months-long coronavirus crisis has seen customers shift from rapidly implementing work-at-home setups to ensuring they’re sufficiently hardened and secure for long-term use.
“If it’s going to be a more permanent feature of the workplace, and I’m starting to come to the view that it is, then I might need something different,” said Dell, chairman and CEO of Dell Technologies. “If I’m going to work from home for an extended period of time, or it’s going to be a more permanent part of how we work, then we’ll need to do something different.”
In April, Michael Dell himself decided to forgo all of his base salary due to the disruption caused by COVID-19 through the last payroll period in Dell’s current fiscal year, which ends Jan. 29, 2021. According to the company’s annual proxy statement filed in 2019, Dell’s salary for fiscal year 2019 was nearly US$1 million.
The Dell salary and hiring freeze news comes as the company is embarking on a massive market share takeover campaign where Dell hopes to win upwards of 50 percent global market share in storage, servers and hyperconverged infrastructure. The campaign is being fueled by Dell’s revamped infrastructure portfolio under its new Power product lines in storage, servers, data protection, networking and converged solutions.
Dell Technologies is slated to report its first fiscal quarter financial results on May 28.