Dell to layoff 6,650 employees as demand for PCs plummets

According to a report by Bloomberg. Announced in a Monday memo, Dell co-chief operating officer Jeff Clarke said the company’s previous cost-cutting measures, such as a pause in hiring and travel restrictions , have proven insufficient, and that the company is experiencing market conditions that “continue to erode with an uncertain future.

The layoffs were announced amid falling demand for PCs and laptops. Following a surge in PC sales during the global covid pandemic, most major computer manufacturers are now seeing a sharp drop in demand. Industry analyst IDC reported a 37% drop in Dell computer shipments during its recent holiday quarter compared to the same three-month period a year earlier. Bloomberg reports that 55% of Dell’s revenue comes from PC sales.

After the layoffs, Dell will have 39,000 fewer employees globally compared to its January 2020 peak.

Clarke said the job cuts are critical to Dell’s “long-term health and success” and the departmental reorganizations are seen as an opportunity to drive efficiency and spur innovation. Global Dell employee numbers will be at their lowest level in six years following the layoffs, according to Bloomberg, down about 39,000 positions from the 165,000 full-time positions reported in January 2020. “We’ve been through economic downturns before and we’ve come out of them stronger,” Clarke said. “We will be ready when the market rebounds.”

Dell is not the only computer brand to be affected by the drop in hardware demand. In November, HP announced plans to cut around 6,000 jobs, while Lenovo laid off an undisclosed number of its US workforce in December 2022. The broader tech industry has also been hit by a slowdown. of the economy due to slow growth, overhiringand supply chain issues, with Meta, Google, Microsoft and Amazon all announcing mass layoffs in recent weeks.

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