Dell Technologies Inc. announced on Monday that it is laying off 6,650 workers — about 5% of its total workforce — citing a decreased demand for PCs as well as economic uncertainty. Vice Chairman and Co-Chief Operating Officer Jeff Clarke said in a memo to employees that the company had already taken steps to “stay ahead of downturn impacts” such as freezing external hiring, reducing spending and limiting business travel, but that “we now have to make additional decisions to prepare for the road ahead.”
The layoffs come after a pandemic-era PC boom that has since seen a sharp downturn in sales. According to industry analysts at IDC, global shipments of PCs were down 28% year-over-year in the fourth quarter of 2022. Dell’s own sales fell 37% during that same period.
Along with reducing staff numbers, Clarke stated the firm would implement a multitude of modifications, such as restructuring the sales group and blending the services area of its consumer and infrastructure divisions. This includes streamlined sales and services, as well as engineering that focuses on “priority offerings.”
Dell shares fell 3.6% on Monday and are down 31% of the last 12 months. The job cuts would bring Dell’s employee count to its lowest in six years, and 39,000 below what it had at the start of the pandemic in January 2020.
The layoffs are part of a wider trend in the tech industry. Major companies such as HP Inc., Cisco Systems Inc. and International Business Machines Corp. have each announced plans to eliminate thousands of workers. Consulting firm Challenger, Gray & Christmas Inc. reported that the tech sector saw a 649% increase in job cuts in 2022, amounting to 97,171 compared with the year prior.
So far, Apple is the only major US tech giant to have avoided significant layoffs. Dell is expected to provide further information on the financial impact of the job cuts when it reports its fiscal fourth-quarter results on March 2.
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