Dell announced in a regulatory filing (opens in new tab) Monday that it is cutting the jobs of 6,650 employees. The news comes after PC sales for the Texas-based computer maker saw a massive drop at the end of 2022.
In a memo viewed by Bloomberg (opens in new tab), co-chief operating officer Jeff Clarke said that market conditions “continue to erode with an uncertain future.” IDC, an industry analyst, told Bloomberg that Dell saw a 37% decline in PCs shipped from Q4 2021 to Q4 2022. Over half of the company’s revenue comes from PC sales.
According to Bloomberg, the 5% reduction in the workforce leaves the company with its lowest headcount in six years. Before the layoffs were announced, Dell had already introduced cost-cutting measures such as hiring freezes and reducing travel. Clarke says the layoffs were crucial for the “long-term health” of the company.
Bloomberg analysts claim the layoffs could bring down Dell’s annual expenses by $700 million to $1 billion and expect a “delayed PC rebound in 2023.” A spokesperson said the job reductions are viewed as an “opportunity to drive efficiency.”
Dell is one of many big companies in the tech sector to announce major layoffs recently. HP let go of nearly 6,000 workers back in November. Lenovo suffered an undisclosed amount of layoffs right before Christmas.
In January, Microsoft (opens in new tab), Meta, and Google (opens in new tab) each laid off over 10,000 employees within weeks of each other. Meta has even hinted that there may be more company-wide layoffs (opens in new tab) to come. Amazon let go of 18,000 employees (opens in new tab), the largest mass layoff in the company’s history.
The reason for all the tech downsizing has been a combination of unpredictable economic conditions and pandemic-era overhiring.
Clark ended the note by saying that Dell has “navigated economic downturns before and emerged stronger” and that they “will be ready when the market rebounds.”
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- Source: https://www.pcgamer.com/dell-to-lay-off-6650-employees-after-underwhelming-pc-sales