Dell to cut about 6,650 jobs, affected by plummeting PC sales

(Bloomberg) — Dell Technologies Inc., facing plummeting demand for personal computers, will shed approximately 6,650 jobs, becoming the latest technology company to announce it will lay off thousands of employees.

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The company is experiencing market conditions that “continue to erode with an uncertain future,” co-Chief Operating Officer Jeff Clarke wrote in a memo viewed by Bloomberg. The reductions amount to about 5 percent of Dell’s global workforce, according to a company spokesperson.

After the PC boom in the pandemic era, Dell and other hardware makers have seen an increase in demand. Industry analyst IDC said preliminary data shows shipments of personal computers fell sharply in the fourth quarter of 2022. Among the major companies, Dell posted the largest decline — 37% from the same period in 2021, according to IDC. Dell generates approximately 55% of its revenue from PCs.

Clarke told workers that previous cost-cutting measures, including hiring pauses and travel caps, were no longer enough. The department’s reorganizations, coupled with job cuts, are seen as an opportunity to promote efficiency, the spokesman said.

Layoffs have hammered the tech sector in recent months, including many of Dell’s peers and competitors. HP Inc., also exposed to the PC market, announced a reduction of as many as 6,000 workers in November. Cisco Systems Inc. and International Business Machines Corp. each said they will eliminate about 4,000 workers. The tech sector announced 97,171 job cuts in 2022, up 649% from a year earlier, according to consultancy Challenger, Gray & Christmas Inc.

After the reduction, headcount at Dell’s Round Rock, Texas-based headquarters will be its lowest in six years—about 39,000 fewer than in January 2020. Only about a third of the company’s employees are based in the United States. United, according to a March 2022 filing.

Dell reported a 6% decline in sales for the period ended Oct. 28 and provided a revenue forecast for the quarter that was lower than analysts’ estimates, saying customers were cutting back on their information technology purchases. The company is expected to provide more information on the financial impact of the job cuts when it reports its fiscal fourth quarter results on March 2.

“We have navigated economic downturns before and emerged stronger from them,” Clarke wrote in his note to employees. “We will be ready when the market recovers.”

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