Enterprise IT giant Dell is about to lay off 6,500 staff, some 5% of its global workforce. It is the latest tech company to make redundancies as businesses worldwide face difficult economic conditions. Dell has been hit particularly hard by the slowdown in the PC market.
Dell is making cuts and reorganising its team as a response to market conditions that “continue to erode with an uncertain future,” co-chief operating officer Jeff Clarke told staff in a memo seen by Bloomberg, which first reported the story.
The changes are an opportunity to drive efficiency, a company spokesperson who confirmed the news told Bloomberg. Tech Monitor has contacted Dell for further comment.
Dell layoffs come as PC market slowdown bites
Clarke told staff that previously introduced cost-cutting measures, such as a hiring freeze and a reduction in business travel, would no longer be enough to sustain the business through the current downturn.
Though Dell’s 2022 annual revenue grew 14% year-on-year, to $105.2bn, its most recent quarterly results, for the three months to the end of October 2022, paint a less pretty picture, with income dropping 6.4%, to $24.7bn. It reports its next quarterly results on March 2.
The company is dealing with a shrinking PC market, with enterprise and consumer spending slowing down after a pandemic-related boom. Figures from Gartner show the PC market contracted by 28.5% in the final quarter of 2022, with Dell seeing shipments fall 37% – the largest drop of the major PC suppliers.
Dell's spending on semiconductors also reduced in the past year, according to figures released today by Gartner. It spent $18m on chips, 12.7% less than in 2022. "A sharp drop in consumer demand for PCs and smartphones prevented the top OEMs [such as Dell] from increasing unit production and shipments,” said Masatsune Yamaji, senior director analyst at Gartner.
Tech job cuts hit industry's biggest names
Today's news means Dell is the latest tech big name to announce sweeping cuts. Earlier this month Google announced it was planning 12,000 redundancies, while Microsoft also announced it was letting 10,000 staff go. The duo followed the likes of Amazon and Meta in making mass layoffs.
The enterprise IT space has also been hit hard, with Salesforce revealing earlier this month that it was axing 7,000 employees.
Thousands of staff are also being made redundant at one of Europe's biggest tech companies, SAP. IBM is due to lay off 3,900 staff as it reorganises following the spin-off of managed services division Kyndryl, though it claims to be recruiting in “client-facing research and development” roles.