Dell lays off 6650 workers as PC sales plunge

According to Bloomberg News, Dell Technologies Inc. will lay off approximately 6,650 employees after suffering a significant financial loss due to declining personal computer sales. This massive layoff will affect around 5% of Dell’s global workforce, according to sources.

Dell is experiencing market conditions that "continue to erode with an uncertain future," writes co-Chief Operating Officer Jeff Clarke in a memo to his employees. According to Clarke, the previous cost-cutting maneuvers taken by the management, which consisted of hiring freezes and limits on travel, are no longer sufficient to manage the company’s finances.

The note written by Clarke to his employees says, “We’ve navigated economic downturns before and we’ve emerged stronger." "We will be ready when the market rebounds." This isn’t the first time Dell has had to let go of staff in recent years. The employer announced a similar layoff back in 2020, when the COVID pandemic hit the US.

According to industry analyst IDC, data shows that personal computer shipments observed a sharp drop in the last quarter of 2022. Dell generates more than one-half (55%) of its entire revenue from PC sales. Among other tech companies, Dell faced the largest drop in sales, a whopping 37% decline when compared with the last quarter of 2021.

Last November, HP also announced plans to eliminate around 6,000 jobs over the coming three years to adjust to the declining demand for personal computers. Before the layoffs, Dell, Cisco Systems Inc., and International Business Machines Corp. also said that they would cut off about 4,000 workers. In total, the tech sector has cut off around 97,171 jobs in 2022. This figure is up by 649% when compared with the previous year, as stated by Challenger, Gray & Christmas Inc.

As told by a company spokesperson for Bloomberg News, the job cuts and department reorganizations are an opportunity to drive efficiency within Dell. Dell Technologies is not the only giant tech employer to let go of its staff to battle rising costs of operation. During the second half of 2022, many other big tech businesses, such as Microsoft, Amazon, Twitter, Meta, and Goldman Sachs Group Inc. have let go of thousands of employees. The decline in consumer demand and the reduction in corporate spending are at the root of the problem, as consumers and businesses alike struggle to keep up with rising interest rates and inflation.