Dell Technologies Inc is laying off 6,650 workers, or 5 percent of its worldwide workforce, as it faces challenges with a downturn in the market for personal computers and prepares for a global recession.
Dell’s decision aligns it with a slew of U.S. firms on Monday, ranging from Goldman Sachs Group Corporation to Alphabet Inc, that already have fired thousands this year to weather a demand slump caused by high rising prices and increasing interest rates.
Dell had already implemented cost-cutting measures such as a hiring freeze and travel restrictions because it coped with a post-pandemic slump in PC sales, which also comprise more than half of its earnings.
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However, those actions are “no longer sufficient,” according to Jeff Clarke, the co-Chief Operating Officer, as he stated in a memo to the workforce.
“What we know is market conditions continue to erode with an uncertain future,” Clarke said. Dell expects to book costs related to the layoffs in its fiscal fourth quarter, which ends in January.
Source: reuters.com
HP Inc has also announced job cuts of up to 6,000 people. As per a research company IDC, the PC, as well as tablet market, will decline by 2.6 percent in 2023 after experiencing fast expansion during the global epidemic due to working remotely.
“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,” said Susannah Streeter, markets analyst, Hargreaves Lansdown.
Source: reuters.com
As of January 28, 2022, Dell had approximately 133,000 staff members, with approximately one-third located in the United States.
Bloomberg News announced the news of the job cuts earlier today.
Dell’s stock was unchanged before the bell.
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According to preliminary findings from industry expert International Data Corp. (IDC), personal computer deliveries will drop dramatically in the final quarter of 2022. According to IDC, Dell experienced the greatest decline within and between major corporations, with a 37 percent drop when compared to the same period in 2021. PCs account for approximately 55 percent of Dell’s earnings.
In 2022, the technical sector declared 97,171 job cuts, an increase of 649 percent compared to the previous year.
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