Dell is preparing to lay off at least 6,650 employees and the situation should not improve any time soon.
PC shipments have plummeted due to the sluggish economy and the effects of the pandemic, and the situation is especially difficult for Dell. The company is announcing a wave of layoffs of about 5% of wages, or about 6,650 jobs, to deal with the “challenging global economic environment.”According to COO Jeff Clark, previous cost-cutting measures, such as freezing external hiring, have not been enough. He explains that a market that “continues to collapse”requires further action.
Dell to lay off at least 6,650 employees
According to Jeff Clark, these layoffs are accompanied by organizational changes and “reboots”. This also includes sales and services, as well as engineering, which are now focused on “priority offerings”. Bloomberg reports that the layoffs will send Dell’s payroll to its lowest level in six years, down 39,000 employees from the start of the pandemic in January 2020.
A situation that should not improve anytime soon
Dell has been one of the biggest beneficiaries of the pandemic as people needed PCs to work from home. Now that this stage is over, the company’s dependence on computers (about 55% of its revenue) is becoming a liability, especially in an economic climate where purchasing power is declining. Garnet and IDC estimate that Dell machine shipments in 2022 will be down 16% year-over-year and 37% in the latest quarter. This is one of the biggest drops among PC resellers. Only Acer fared worse with a 41% decline in the last quarter of 2022.
This is just the latest wave of layoffs at the tech giants to date. And it comes just a few months after it was initiated by HP’s main competitor, which has spun off at least 6,000 employees. Some technology companies have managed to avoid layoffs and even perform well, such as Apple. In any case, Dell’s situation seems to be directly related to the global economic situation. To be continued!