According to Bloomberg, computer manufacturer Dell plans to cut approximately 6,650 jobs, or 5% of its global workforce. Dell Co-Chief Operating Officer Jeff Clarke announced in a memo on Monday that the company’s previous cost-cutting measures, such as a pause on hiring and travel restrictions, had proven insufficient, and that the company is experiencing market conditions that “continue to erode with an uncertain future.”
The layoffs were announced in response to a drop in demand for PCs and laptops. Following a surge in PC sales during the global flu pandemic, most major computing manufacturers are now experiencing a significant drop in demand. Industry analyst IDC reported a 37 percent decline in Dell’s computer shipments during its recent holiday quarter compared to the same three-month period the previous year. Bloomberg reports that 55 percent of Dell’s revenue is generated from PC sales.
After the layoffs, Dell will employ 39,000 fewer people globally than it did at its busiest in January 2020.
According to Clarke, employment reductions are necessary for Dell’s “long-term health and success,” and department reorganizations are seen as a chance to increase productivity and foster creativity. According to Bloomberg, the number of global Dell employees after the layoffs will be at its lowest level in six years, with approximately 39,000 fewer employment than the 165,000 full-time roles recorded in January 2020. We have survived previous economic downturns and come out stronger, added Clarke. “When the market recovers, we will be prepared.”
Falling hardware demand affects many computing brands than just Dell. In November, HP announced intentions to eliminate about 6,000 positions, while in December 2022, Lenovo will terminate an unspecified portion of its US staff. Due to poor development, excessive recruiting, and supply chain concerns, the broader tech industry has also been hurt by the economic slump; in recent weeks, Meta, Google, Microsoft, and Amazon have all announced large-scale layoffs.