(Bloomberg) — Dell Technologies Inc., facing a sharp drop in personal computer demand, will cut about 6,650 jobs, becoming the latest tech company to announce it will lay off thousands of employees.
Most read from Bloomberg
Co-CEO Jeff Clarke wrote in a memo seen by Bloomberg. The cuts represent about 5% of Dell’s global workforce, according to a company spokesman.
After the PC boom during the pandemic, Dell and other hardware makers have seen demand dwindle. Industry analyst IDC says preliminary data shows that personal computer shipments fell sharply in the fourth quarter of 2022. Among major players, Dell saw the biggest drop – 37% year-on-year in 2021. , according to IDC. Dell generates about 55% of its revenue from PCs.
Clarke told workers that previous cost-cutting measures, including hiring pauses and travel restrictions, were no longer enough. The spokesperson said the division’s reorganization, along with job cuts, was seen as an opportunity to boost efficiency.
Layoffs have plagued the tech sector in recent months, which includes many of its peers and competitors to Dell. HP Inc., which also has exposure to the PC market, in November announced cuts of up to 6,000 workers. Cisco Systems Inc. and International Business Machines Corp. Each company said it would lay off about 4,000 workers. The tech sector announced 97,171 job cuts in 2022, up 649% year-over-year, according to consulting firm Challenger, Gray & Christmas Inc.
After the cuts, Dell’s headcount based in Round Rock, Texas will be at its lowest level in at least six years – about 39,000 fewer employees than in January 2020. Only about a third of employees. of the company is American, according to a report. Submit application in March 2022.
Dell reported a 6% drop in sales for the period ended October 28 and gave its revenue forecast for the current quarter below analyst estimates, indicating customers are reducing purchases. information technology. The company is expected to provide more information on the financial impact of the job cuts when it reports fourth-quarter financial results on March 2.
“We’ve weathered the recession before and we’ve come out stronger,” Clarke wrote in a letter to employees. “We will be ready when the market recovers.”
Most read from Bloomberg Businessweek
©2023 Bloomberg LP
