Dell to cut 6,600 jobs as PC sales record sharp decline

With the demand for personal computers taking a plunge, Dell Technologies Inc. has decided that it will eliminate about 6,650 jobs, joining a host of latest technology firms to announce job cuts.

The company is experiencing market conditions that “continue to erode with an uncertain future”, Co-Chief Operating Officer Jeff Clarke wrote in a memo viewed by Bloomberg. According to a company spokesperson, the reductions amount to about 5% of Dell’s global workforce.

As per preliminary data, PC shipments witnessed a sharp decline in the fourth quarter of 2022. Moreover, Dell saw the largest decline — 37% compared with the same period in 2021. About 55% of the Dell’s revenue comes from PCs.

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The company told workers that cost-cutting measures, including a pause on hiring and limits on travel, initiated earlier are no longer enough. “The department reorganisations, along with the job reductions, are viewed as an opportunity to drive efficiency,” the spokesperson said.

The tech sector has seen a spike in layoffs in recent months. Like Dell, HP Inc. announced a reduction of as many as 6,000 workers in November last year. Cisco Systems Inc. and IBM Corp. also said they would eliminate about 4,000 workers each. The tech sector announced 97,171 job cuts in 2022, up 649% compared with the previous year, according to consulting firm Challenger, Gray & Christmas Inc.

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Dell registered a decline of 6% in the period ended October 28 and gave a revenue forecast for the current quarter that fell short of analysts’ estimates, contending that customers were slashing their IT purchase. The company is expected to provide further information on the financial impact of the job cuts when it reports fiscal fourth-quarter results on March 2.

“We’ve navigated economic downturns before and we’ve emerged stronger,” Clarke wrote in his note to employees. “We will be ready when the market rebounds.”