Tech layoff: Dell to cut 6,650 jobs, 5% of its total workforce

Dell Technologies Inc., is planning to lay off thousands of workers is which will cut around 6,650 jobs in response to the sharp decline in demand for personal computers.

According to Jeff Clarke, co-chief operating officer, the company is dealing with market conditions that "continue to erode with an uncertain future."

According to a business spokesperson quoted by The Economic Times, the layoffs will affect around 5% of Dell's overall workforce.

Dell and other hardware manufacturers have witnessed cratering demand following a PC boom during the pandemic. The fourth quarter of 2022 saw a dramatic decline in personal computer shipments, according to industry analyst IDC's preliminary figures. 

Dell's PC sales

According to IDC, Dell experienced the worst loss among large corporations, falling 37% from the same time in 2021. PC sales account for around 55% of Dell's total income.

Clarke informed employees that prior cost-cutting initiatives, such as a halt on hiring and travel restrictions, are insufficient today.

The job cuts and departmental reorganisations are seen as a chance to increase efficiency, the spokesperson said to The Economic Times.

In recent months, layoffs have severely impacted the tech industry, affecting many of Dell's peers and rivals. HP Inc., which is also heavily dependent on the PC market, stated in November that it will be laying off up to 6,000 people.

Cisco and International Business Machines

Both Cisco Systems Inc. and International Business Machines Corp. announced layoffs of around 4,000 employees apiece.

According to consultancy company Challenger, Gray & Christmas Inc., the tech sector disclosed 97,171 job cutbacks in 2022, an increase of 649% from the previous year.

After the cut, Dell's headcount will be at its lowest point in at least six years, with around 39,000 fewer workers than in January 2020. Dell is based in Round Rock, Texas. According to a March 2022 filing, only around one-third of the company's employees are based in the US.

Dell stated that customers were lowering their purchases of information technology in the period ending on October 28 and provided a revenue forecast for the current quarter that fell short of analysts' predictions.

When it releases its financial results for the fourth quarter of its fiscal year on March 2, the corporation is anticipated to offer more details on the financial impact of the job layoffs.

“We've navigated economic downturns before and we've emerged stronger,” Clarke wrote in his note to employees. “We will be ready when the market rebounds.”