The ongoing global economic headwinds have spared none. Several tech companies have reduced their workforce to cut operational costs and stay afloat during this economic downturn. Alphabet (Google), Amazon, HP, IBM, Meta, Microsoft, PayPal, Tesla, Twitter, and many others have announced mass layoffs in recent weeks, impacting thousands of people. Dell has now joined the wave. The Texas-based PC maker will lay off approximately five percent of its global workforce, or about 6,650 employees.
Dell announced its latest job cuts in an SEC filing Monday. The company expectedly cited the “challenging global economic environment” for this decision, as consumer spending on new PCs plunged. In a memo to employees, published as part of the SEC filing, Dell’s Co-Chief Operating Officer (co-COO) and Vice Chairman Jeff Clarke said that earlier cost-cutting measures such as external hiring freeze, limited travel, and reduced outside services spending have proved to be insufficient to navigate these challenges.
Considering the uncertainty of the market, Dell must take additional steps to “prepare for the road ahead,” Clarke said. This includes a mass layoff and other organizational changes and resets. The company plans to streamline sales and services, including integrating its support services into the Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG). It will also focus its ISG engineering teams and resources on “priority offerings.”
Dell is laying off about 6,650 employees
Like many other tech companies, Dell also benefitted from a sharp increase in demand for PCs during the coronavirus pandemic. But as the pandemic subsided, the demand declined. The recent economic downturn further hit PC sales. Dell reportedly suffered a 37 percent drop in sales in the fourth quarter of last year compared with the same period in 2021. With the situation expected to remain the same or even worsen in the coming months, the company has announced a major job cut.
According to Bloomberg, this mass layoff will reduce Dell’s global workforce to just over 126,000, its lowest employee count in six years. The company had over 165,000 employees at the end of January 2020, when the coronavirus pandemic had started to sweep the world and PC demand was rising. This means the PC giant has cut around 39,000 jobs over the past three years. It’s not just Dell firing employees, though. This has been an industry-wide trend lately. Tech companies reportedly laid off over 97,000 employees last year.
Dell is expected to provide further information about its latest job cut and restructuring when it announced its Q4 2022 financial results next month. The company’s co-COO is confident that Dell will navigate these economic difficulties and come back stronger. “We’ve navigated economic downturns before and we’ve emerged stronger,” Clarke said to employees in his memo. “We will be ready when the market rebounds.”