Dell to lay off 6650 employees as PC demand drops: Report
Dell Technologies Inc., facing falling demand for personal computers, will lay off approximately 6,650 workers, becoming the latest technology company to announce job cuts.
The company is dealing with market conditions that “continue to erode with an uncertain future,” according to a memo obtained by Bloomberg. According to a company spokesperson, the layoffs amount to about 5% of Dell’s global workforce.
Dell and other hardware manufacturers have seen a drop in demand following a pandemic-era PC boom. According to preliminary data from industry analyst IDC, personal computer shipments will drop dramatically in the fourth quarter of 2022. According to IDC, Dell experienced the greatest decline among major corporations, with a 37% drop compared to the same period in 2021. PCs account for approximately 55% of Dell’s revenue.
Clarke informed employees that previous cost-cutting measures, such as a hiring freeze and travel restrictions, are no longer sufficient. According to the spokesperson, the department reorganisations and job cuts are viewed as an opportunity to drive efficiency.
In recent months, the tech sector has been hit hard by layoffs, including many of Dell’s peers and competitors. HP Inc., which is also heavily invested in the PC market, announced a 6,000-person layoff in November. Cisco Systems Inc. and International Business Machines Corp. both announced layoffs of approximately 4,000 employees. According to consulting firm Challenger, Gray & Christmas Inc., the tech sector announced 97,171 job cuts in 2022, an increase of 649% from the previous year.
Dell reported a 6% drop in sales for the quarter 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 reports its fiscal fourth-quarter results on March 2, it is expected to provide more information on the financial impact of the job cuts.
Dell’s headcount will be the lowest in at least six years following the reduction, with approximately 39,000 fewer employees than in January 2020. According to a March 2022 filing, only about one-third of the company’s employees are based in the United States.
“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.”
Follow Startup Story
Related Posts
