Dell to fire over 6,600 employees as PC sales nosedive
What's the story
Another week, another tech company has announced its decision to lay off employees. This time, it is computer manufacturer Dell that is set to reduce its workforce.
Per Bloomberg, Dell Technologies Inc. will fire about 6,650 staffers representing around 5% of its global workforce.
The decision to terminate roles was announced by chief operating officer Jeff Clarke in a memo.
Context
Why does this story matter?
The post-COVID period has seen computer sales taking a huge hit. Dell joins the ranks of HP, IBM, and Lenovo to announce layoffs.
The economic downturn has also affected the broader tech industry, with giants such as Amazon, Google, Microsoft, and Meta firing employees en masse.
Layoffs have become an everyday affair with economic uncertainty showing no signs of retreat.
Layoffs
Previous cost-cutting measures have proved insufficient
In his memo, Clarke said that the company is experiencing market conditions "that continue to erode with an uncertain future."
The company's decision to cut jobs comes as a last-ditch effort to stabilize the cost structure. According to Clarke, previously implemented cost-cutting measures, such as a pause on hiring and restrictions on travel, have proven to be insufficient.
Falling demand
Dell's PC shipments fell 37% in the fourth quarter
Computer sales leaped during the pandemic. However, once the dust settled, things changed.
Per industry analyst IDC's latest report on PC shipments, global shipments of PCs fell 28.1% year-over-year in the fourth quarter.
Dell was among the worst hit, as its shipments fell 37% in the holiday quarter. The company generates 55% of its revenue from PCs.
Workforce
Dell's workforce will be at its lowest in 6 years
Following the job cuts, Dell's workforce will be at its lowest in six years. The Texas-based company will have around 39,000 fewer employees compared to 1,65,000 full-time staffers in January 2020.
Clarke said the layoffs are necessary for Dell's "long-term health and success."
"We've navigated economic downturns before, and we've emerged stronger," he stated. "We will be ready when the market rebounds."
Official words
Dell said that it is 'addressing its cost structure'
Dell confirmed layoffs in a statement. However, it did not specify how many people would lose their jobs.
The company said that it is evaluating its business to ensure that it has the "right number of team members."
"We're addressing our cost structure to make sure we're as competitive as we should be now and for future opportunities," the company said.