Layoffs are sweeping across the tech industry as PC sales falter and companies button down for a looming recession. Dell is not immune to these concerns and will lay off 6,650 employees in the coming months. According to Bloomberg, this represents roughly 5% of the company’s global footprint.
Over the past six years, Dell’s global headcount peaked at 165,000 in 2020. However, the latest cuts will see that figure fall to just 126,300 employees.
In a memo to employees (opens in new tab) this morning, Dell Vice Chairman and Co-Chief Operating Officer Jeff Clark stated, “What we know is market conditions continue to erode with an uncertain future. The steps we’ve taken to stay ahead of downturn impacts – which enabled several strong quarters in a row – are no longer enough.”
Dell will streamline its operations, including realigning its Regional Sales and Dell Technologies Select teams reporting to one “leader” as a cost-efficiency measure. Changes are also being made to the Infrastructure Solution Group and Client Solution Group to reduce customer service costs.
Clarke added that while Dell will be sad to see valued employees leaving the fold, he added that it was a tough decision “we had to make for our long-term health and success.”
According to IDC, global PC shipments cratered 28 percent in Q4 2022 compared to the same period in 2021. Shipments of desktops, laptops, and workstations fell to just 67.2 million units for the quarter. At the time, the research firm claimed that “the pandemic boom is over for the PC market.
Dell is not alone in widespread layoffs in tech. Microsoft will eliminate 10,000 positions during 2023 after quickly ramping up hires during the pandemic. Hewlett-Packard said it would part ways with 6,000 employees in November 2022, and Lenovo announced layoffs across its U.S. workforce in December.
According to Bloomberg Intelligence senior analyst Woo Jin Ho, Dell’s actions could “cut annual expenses by $700 million to $1 billion, helping to preserve margin and limiting the dent to EPS.”