Dell Technologies Inc. is the latest tech company to announce layoffs, with the computing giant letting go of 6,650 workers, or 5% of its total workforce, due to a reduced demand for PCs and changing infrastructure requirements. Jeff Clarke, Dell’s co-chief operating officer, declared that market conditions are still deteriorating with the future being uncertain. The methods implemented to maintain our success in the face of economic turbulence, resulting in numerous successive quarters of growth, are no longer sufficient. We must now make supplementary decisions to prepare for the future.
The layoffs come as Dell and the rest of the tech industry grapple with the economic impact of the pandemic. Global PC shipments dropped 28% in the fourth quarter of 2022 compared to the year before, according to market analysis firm IDC, with Dell’s shipments falling 37%, the steepest decline among major U.S. computer makers.
Clarke stated that the cost-reduction efforts previously enacted, like a hiring freeze and restrictions on travel, are now inadequate. The department reorganizations, along with the job reductions, are viewed as an opportunity to drive efficiency, according to a Dell spokesperson. The painful job cuts come with a reorganization that will change how its sales teams operate around the globe, as well as shifts inside Dell’s channel leadership.
Dell is taking steps to reorganize its sales, customer-support, product-development and engineering teams. The company said it is “continuously assessing” its business to ensure they’re able to deliver the best innovation, value, and service to their customers and partners. It has been necessary to restructure our departments in order to maximize efficiency, which has meant fewer team members across the world. This decision was not taken lightly and we will provide assistance to those affected as they search for new opportunities.
Shares of Dell were down 3% early Monday and are down 31% over the last 12 months. Dell is expected to provide more insights about the job cuts when it delivers its fourth-quarter economic report on March 2. Apple, meanwhile, has so far managed to avoid significant layoffs by hiring at a slower rate than its rivals, though it too is expected to reduce its headcount by reducing hiring.
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