Dell to lay off 6,650 workers after falling PC sales

Dell to lay off 6,650 workers after falling PC sales

The company will cut jobs as demand for personal computers plummets, becoming the latest technology company to announce thousands of job cuts.

The reduction equates to about 5% of Dell’s global workforce, the company said in a regulatory notice early Monday. Dell is experiencing market conditions that “continue to erode with an uncertain future,” said co-chief operating officer Jeff Clarke.

Dell to lay off 6,650 workers

Following the pandemic-era rise of personal computers, Dell and other hardware makers have seen demand plummet. Industry analysis firm IDC said preliminary data shows PC shipments fell sharply in the fourth quarter of 2022. Among major companies, Dell experienced the largest decline, down 37% compared to the same period in 2021. Dell generates about 55% of its revenue from PCs.

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Clarke told workers that previous cost-cutting measures, including hiring suspensions and limits on travel, are no longer enough. 

The technology sector has been hit by a wave of layoffs in the past few months, including many of Dell’s peers and competitors.

  • HP equally exposed to the PC market, announced in November cutting up to 6,000 jobs.
  • Cisco Systems Inc. and International Business Machines Corp. announced that cut some 4,000 positions.
  • The tech sector reported 97,171 job cuts in 2022, up 649% from the previous year, according to consultancy Challenger, Gray & Christmas Inc.

Following the reduction, the workforce at Round Rock, Texas-based Dell will be the lowest in at least six years, with about 39,000 fewer employees than in January 2020. Only about a third of the company’s employees are located in the United States, according to a March 2022 statement.

Dell posted a 6% sales decline in the period that ended October 28 and presented a revenue forecast for the current quarter that missed analysts’ estimates, arguing that customers were cutting back on their technology purchases information. The company is expected to provide more information on the financial impact of the headcount cuts when it presents fiscal fourth-quarter results on March 2.

“We have been through economic crises in the past and have come out stronger,” Clarke wrote in his note to employees. “We will be ready when the market picks up.”

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