Bloomberg news agency reported on February 6 that Dell will cut about 6,500 jobs, or about 5% of its global workforce.
According to Livemint , Dell becomes the latest tech company to announce massive layoffs . In the memo obtained by Bloomberg, Dell co-CEO Jeff Clarke said the company is experiencing a market situation that “continues to erode with an uncertain future.”
Also in the letter to employees, Clarke said the company had previously weathered the recession and came out stronger, so Dell will be ready to return when the market recovers. Earlier, Dell also announced the layoff of many employees in 2020 when the Covid-19 pandemic broke out.
DIC’s analysis data shows that sales of personal computers fell sharply in the fourth quarter of 2022. Among large companies, Dell has the largest decline with 37% year-on-year in 2021. It is known that 55% of Dell’s revenue comes from the PC segment.
Before Dell, HP also said in early November 2022 that it would cut up to 6,000 jobs over the next three years as demand for PCs fell, cutting profits. In addition, Cisco or IBM have also announced that they will lay off about 4,000 jobs. Data shows the tech industry cut 97,171 jobs in 2022, up 649% from 2021, according to consulting firm Challenger, Gray & Christmas.
After the cuts, Dell’s headcount will be at its lowest level in at least six years. As of January 2020, the company had about 39,000 employees, with a third of these being Americans.
On January 15, Dell decided to reduce its reliance on Chinese chips due to the escalating trade conflict between the US and China. However, it will not be until 2024 that Dell will stop using Chinese-made chips.
In November 2022, Dell posted a 68% increase in third-quarter operating profit, as strong demand for servers and networking gear supported weak PC sales and eased supply chain pressures that helped curb expense. The company said operating costs fell 8% in the third quarter of 2022. The airline is expected to provide more information on the financial impact of the job cuts when it reports its fourth-quarter 2022 financials on March 2.