Dell Technologies Inc. is the most recent company in the technology industry to announce it will let go of thousands of employees due to a decline in the demand for personal computers. Co-Chief Operating Officer Jeff Clarke stated in a memo that the company is dealing with market conditions that continue to degrade with an uncertain future.
According to a company spokesman, the layoffs will affect about 5% of Dell’s whole workforce. After a PC boom during the epidemic, demand for Dell, as well as other hardware manufacturers, has collapsed. Personal computer shipments fell significantly in the 4th quarter of 2022, according to preliminary statistics from industry analyst IDC. According to IDC, Dell experienced the greatest decline among large corporations, a 37% drop from the same time in 2021. About 55% of Dell’s income comes from personal computers.
The hiring freeze and travel restrictions that were previously used as cost-cutting measures, according to Clarke, are no longer sufficient. According to the spokeswoman, departmental restructuring and employment cuts are seen as a chance to increase productivity. Many of Dell’s peers and rivals have seen layoffs recently, which has severely impacted the tech sector.
Similar to other companies vulnerable to the PC industry, HP Inc. said in November that it would be laying off up to 6,000 people. International Business Machines Corp. and Cisco Systems Inc. both announced layoffs of around 4,000 employees. Challenger, Gray & Christmas Inc., a consulting firm, reports that the tech sector declared 97,171 job cutbacks in 2022, an increase of 649% from the previous year.
After the cut, Dell’s headcount will be at its lowest point in at least 6 years, with around 39,000 fewer workers than in January 2020. Dell is based in Round Rock, Texas. Only about a third of the employees of the company are situated in the United States as per a March 2022 filing.
Dell stated that customers were lowering their purchases of information technology in the quarter that ended in October and provided a revenue forecast for the current quarter that fell short of analysts’ predictions. On March 2, the company is expected to provide more information on the financial impact of the job cuts when it reports its financial results for the 4th quarter of its fiscal year.