In its most recent round of layoffs, Dell will eliminate nearly 6,600 employees or 5% of its workforce
Dell is dealing with market conditions that “continue to degrade with an uncertain future,” according to a memo seen by Bloomberg
Dell Technologies Inc., facing declining demand for personal computers, will lay off around 6,650 employees, becoming the latest technology company to announce job cuts.
The company is dealing with market conditions that “continue to degrade with an uncertain future,” according to a memo seen by Bloomberg. According to a company representative, the layoffs amount to around 5% of Dell’s global workforce.
Dell and other hardware manufacturers have noticed a drop in demand following a pandemic-era PC boom. According to preliminary statistics from industry analyst IDC, personal computer shipments will drop dramatically in the fourth quarter of 2022. According to IDC, Dell experienced the greatest loss among significant corporations, with a 37% drop compared to the same period in 2021. PCs account for around 55% of Dell’s revenue.
Clarke informed employees that past cost-cutting initiatives, such as a hiring freeze and travel restrictions, are no longer sufficient. According to the spokeswoman, department reorganizations and employment cuts are considered a chance to drive efficiency.
The computer industry has been struck severely by layoffs in recent months, including many of Dell’s rivals and competitors. In November, HP Inc., which is also heavily invested in the PC market, announced a 6,000-person layoff. Both Cisco Systems Inc. and International Business Machines Corp. announced layoffs of around 4,000 employees. According to research firm Challenger, Gray & Christmas Inc., the tech sector will shed 97,171 jobs in 2022, a 649% increase from the previous year.
Dell’s headcount will be the lowest in at least six years following the decrease, with around 39,000 fewer employees than in January 2020. According to a March 2022 filing, only around one-third of the company’s employees are situated in the United States.
Dell announced a 6% drop in sales for the quarter that ended Oct. 28 and a revenue forecast for the current quarter that fell short of analysts’ expectations, citing customers’ reduced purchases of information technology. When the company announces its fiscal fourth-quarter earnings on March 2, it is likely to disclose more information on the financial impact of the job layoffs.
“We’ve been through economic downturns before, and we’ve always come out stronger,” Clarke wrote in his email to employees. “When the market recovers, we will be ready.”
