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Dell Technologies is eliminating around 6,650 positions, or 5% of its global workforce, as it battles with a downturn in the personal computer industry and prepares for a possible recession.
Dell’s move on Monday places it in line with a slew of corporations, from Goldman Sachs Group to Alphabet, that have let off thousands of employees this year to weather a demand slowdown caused by high inflation and increasing interest rates.
As a result of a post-pandemic decline in PC sales, which constitute for over half of Dell’s income, the company has already implemented cost-cutting measures such as a hiring freeze and travel restrictions.
Co-Chief Operating Officer Jeff Clarke stated in a note to workers that these measures are “no longer sufficient.”
Clarke stated, “We are aware that market conditions continue to deteriorate, and their future is uncertain.”
Dell anticipates recording costs associated with the layoffs in its fiscal fourth quarter, which concludes in January.
HP, a competitor, has recently said that it will eliminate up to 6,000 positions. The market for PCs and tablets is expected to shrink by 2.6% in 2023, according to research firm IDC, following fast growth during the pandemic due to remote working.
Given the company’s sensitivity to consumer and corporate confidence, it was only a matter of time until the tsunami of IT layoffs reached Dell, according to Susannah Streeter, markets analyst at Hargreaves Lansdown.
On January 28, 2022, Dell had around 133,000 employees, of which approximately one-third were based in the United States.
The layoffs were initially reported by Bloomberg News on Monday morning.
Dell’s stock price fell 4.2% to $40.48.
»Dell is eliminating almost 6,500 positions as the PC market declines«