Dell Technologies announced that it will let go of 6,650 employees, about 5 per cent of its global workforce, becoming the latest major tech firm to serve mass layoffs. The company arrived at this decision due to a drop in demand for its personal computers (PCs).
The company is experiencing market conditions that "continue to erode with an uncertain future," co-chief operating officer Jeff Clarke wrote in a memo to employees, as per a Bloomberg report. It was added in the memo that previous cost-cutting measures like bringing a pause to hiring, and putting limits on travel, are no longer sufficient.
Clarke added in the note, “We’ve navigated economic downturns before and we’ve emerged stronger...We will be ready when the market rebounds.”
After the Covid-19 pandemic struck, there was a spike in PC and other hardware sales for Dell as well as other tech majors. However, according to preliminary data reviewed by industry analyst IDC, PC shipments fell sharply in the fourth quarter of 2022.
Dell, which generates about 55 per cent of its revenue from PC sales, saw a decline of 37 per cent in 2022 as against the same period of the previous year. According to IDC, the fall in demand for Dell PCs were the largest among major PC makers.
Tech layoffs have been making headlines the past few months with several tech giants like Alphabet, Microsoft and Meta announcing mass layoffs. Other PC market players like HP, Cisco and IBM also announced mass layoffs recently with the former letting go off as many as 6,000 employees while the other two handed out pink slips to around 4,000 staff members.