Dell cuts almost 7,000 jobs as computer sales fall
Dell has revealed plans to axe five per cent of its global workforce amid failed restructuring efforts and falling consumer demand for computers.
“This is a difficult decision that was not made lightly, and we’ll support those impacted as they transition to their next opportunity,” a spokesperson for Dell said.
Chief operating officer Jeff Clarke wrote to staff outlining plans to cut 6,650 jobs, according to reports.
Clarke said Dell’s previous efforts to improve efficiency, such as pressing pause on recruitment and reducing expenses, were “no longer enough”.
“Market conditions continue to erode with an uncertain future,” he said, according to the memo, seen by Bloomberg.
Behind the job cuts, is a weak demand for personal computers (PCs). According to the International Data Corporation, preliminary data shows Dell’s PC sales, which generate more than half its revenue, have seen a 37 per cent year-on-year drop in the fourth-quarter of 2022.
Susannah Streeter, senior investment and markets analyst, at Hargreaves Lansdown said it was “only a matter of time before the wave of tech layoffs reached Dell’s shores, given how sensitive the company is to both consumer and corporate confidence”.
“With interest rates hurtling upwards and more firms becoming cautious, there has been a double whammy effect on PC sales,” she said.
Streeter questioned whether, given the decline in sales, the job cuts will be sufficient to help revive the business.
Dell shares dipped before the stock market opened this morning but have picked up since.
News of the cuts at Dell will come as no surprise to the global tech industry, which has let nearly 160,000 people go in 2022 and over 88,000 in 2023, according to data from layoff tracking website layoffs.fyi.
Apple is the only noticeable exception of major tech firms yet to announce redundancies.