Dell cuts 6,650 jobs to deal with plunging PC demand

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The headcount at computer giant Dell is set to sink to its lowest in six years after the company confirmed it was axing more than 6,600 jobs—the latest in a spate of huge tech layoffs.

In a company-wide memo posted to Dell Technologies’ Blog titled ‘Preparing for the road ahead’, the organization’s co-chief operating officer, Jeff Clarke, said the business is experiencing market conditions which “continue to erode with an uncertain future”.

He added: “Unfortunately, with changes like this, some members of our team will be leaving the company. There is no tougher decision, but one we had to make for our long-term health and success.”

Around 5% of the company’s workforce will be impacted by the layoffs.

A spokesperson told Fortune that the company had previously rolled out a raft of cost-cutting measures, which have simply not done enough.

They added: “Dell continuously assesses our business to ensure we’re set up to deliver the best innovation, value and service to our customers and partners. This is especially important as economic uncertainty has continued.

“Since June, we paused external hiring and reduced spending to navigate a challenging global environment. We have further opportunity to drive efficiency through department reorganizations, which has resulted in a reduction of team members across the globe. This is a difficult decision that was not made lightly, and we’ll support those impacted as they transition to their next opportunity.”

Determined to find a silver lining, Clarke added the company had weathered such storms before and “emerged stronger”, adding: “We will be ready when the market rebounds. The opportunities ahead of us are immense.”

Clarke’s blog also hinted at which teams will be seeing changes in the coming months, pointing at Regional Sales and Dell Technologies Select (DTS) teams as ones that will be “aligned”.

End of the PC boom?

However, comparatively to the rest of the market, Dell has the furthest to go toward recovery.

The company lucked out in the PC boom which came hand-in-hand with the pandemic, as employees and schoolchildren needed to find a way to work and learn from home.

Dell was named by tech researcher Gartner as among the six brands to cash in as the sector saw the fastest growth in 20 years.

Dell’s shipments contributed to the 69.9 million laptops and desktops which were still being shipped out as of the first quarter of 2021.

However, there has since been a major decline as staff return to the office and pupils to their desks.

According to IDC’s data, Dell has seen the greatest drop in shipments between Q4 of 2022 and Q4 of 2021 compared to its major competitors.

Dell shifted 10.8 million units in the final quarter of last year and 17.2 million the same period the year before, a drop of more than 37%.

Comparatively, Apple has weathered the storm fairly well, seeing growth drop by just 2% from 7.7 million units to 7.5 million 12 months later.

Which other companies have announced layoffs?

At this point, it might be easier to identify companies that haven’t announced job cuts as opposed to those that have.

Last week Salesforce announced a second round of cuts having already axed 10pc of its family in January 2022. On Thursday Fortune reported the “#all-salesforce” Slack channel went from roughly 82,500 members on Feb. 1 to roughly 80,600 today, signaling that 1,900 workers may have been cut. 

Google’s parent company Alphabet made a similar announcement last month.

On Jan. 20 CEO Sundar Pichai announced the firm would be laying off around 12,000 people with one employee on maternity leave saying she discovered her job had been axed when she was feeding her newborn daughter in the middle of the night.

At the end of January PayPal also conceded it needed to cut 2,000 employees, around 7% of its workforce.

At the end of January, Spotify announced it was cutting 6% of its workforce, with CEO Daniel EK saying he took “full responsibility” for the problems which lead to the news, adding: “Like many other leaders, I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us. In hindsight, I was too ambitious in investing ahead of our revenue growth.”

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