Dell, the landmark computer manufacturing company, will be cutting 6,650 employees, or 5% of its global workforce, according to an SEC filing.
The move is the latest example of tech companies making cuts to maneuver their way through an uncertain economic climate. Industry analysts at IDC reported global shipments of PCs down 28% year-over-year in the fourth quarter of 2022, a prevailing indicator of the weakening demand for laptops and PCs.
Computer shipments at Dell were down 37% for that same period, while competitors Lenovo, HP, and Apple were down 28%, 29%, and 2%, respectively.
In a memo to employees Monday, Dell Co-Chief Operating Officer Jeff Clarke said that the company’s previous cost-cutting measures, such as a pause on hiring and limitations on travel, have proved insufficient. Clarke added that the company is experiencing market conditions that “continue to erode with an uncertain future.”
“The steps we’ve taken to stay ahead of downturn impacts – which enabled several strong quarters in a row – are no longer enough,” Clarke said. “We now have to make additional decisions to prepare for the road ahead.”
As of January 2022, Dell said it had 133,000 employees. Clarke said that the job cuts are essential for Dell’s “long-term health and success,” and department reorganizations are being viewed as an opportunity to drive efficiency and boost innovation.
Clarke noted in the memo that Dell has navigated economic downturns before, and “emerged stronger” as a result. “We will be ready when the market rebounds,” he wrote.
Dell’s struggles are not unique, as many of its major competitors have been faced with the grim reality of a shrinking personal computing market. In November, HP announced plans to cut around 6,000 jobs, while Lenovo laid off an undisclosed number of its U.S. workforce in December 2022.
The broader tech industry has also been subject to the gripping economic instability. Meta, Amazon, Google, and Microsoft all have recently announced they would be laying off employees.
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