Dell Cuts 6,650 Jobs in Latest Round of Tech Giant Massive Layoffs

dell cuts jobs massive layoffs tech technology

Tech giant Dell cuts 6,650 jobs from its workforce due to budget cuts brought about by the plummeting sales of computers. Dell is the latest tech company to announce layoffs after Facebook, Microsoft, and Google have all announced their own layoffs in the past few months. This series of layoffs is an indicator of the global slowdown in the sales of computing technology.

Dell Is The Latest Tech Company To Announce Layoffs

Towards the end of 2022, several tech companies announced massive layoffs of their workforce due to the global cooling of the economy and specifically the growth of the tech sector. Google has announced a massive layoff of around 12,000 jobs, which is the largest they have had in their history. Microsoft has also announced a cut of 10,000 jobs, while Amazon decided to cut a whopping 18,000 jobs, which is the largest workforce reduction in the electronic retailer’s 28-year history.

Much of the layoffs have been seen as an effect of the pandemic, with a growth slowdown in demand for computers and technology in general. This has been compounded by higher interest rates to combat inflation and fears of a total recession in the coming months. Even Dell’s biggest competitor in the PC market, HP, has previously announced its own layoffs of about 6,000 employees.

Other companies suffering from job cuts include Facebook, Twitter, Salesforce, and even Elon Musk’s own Tesla, which is seeing a reduction of around 6,000 jobs just to ensure that they stay afloat and continue doing business. 

Dell Cuts 6,650 Jobs Due To Uncertain Future

Around 5% of Dell’s global workforce will be cut, the firm stated in a regulatory filing early on Monday. Co-Chief Operating Officer Jeff Clarke stated in a document seen by Bloomberg that Dell is dealing with market conditions that “continue to erode with an uncertain future.” According to a March 2022 filing, about one-third of Dell’s workforce is situated in the US.

Shares of Dell fell 3.3% upon the announcement, and it hasn’t bounced back since.

Dell and other hardware manufacturers have witnessed cratering demand following a PC boom during the pandemic. The fourth quarter of 2022 saw a dramatic decline in personal computer shipments, according to industry analyst IDC’s preliminary figures. According to IDC, Dell experienced the worst loss among large corporations, falling 37% from the same time in 2021. PC sales account for around 55% of Dell’s total income.

Previous Cost-Cutting Measures Weren’t Enough

Clarke informed employees that prior cost-cutting initiatives, such as a halt on hiring and travel restrictions, are insufficient today. According to a business representative, departmental restructuring and job cuts are seen as a chance to increase productivity.

After the cut, Dell’s headcount will be at its lowest point in at least six years, with around 39,000 fewer workers than in January 2020. Dell is based in Round Rock, Texas. According to a document, Dell sold its part in VMware in November 2021. After the spinoff, VMware employed around 37,500 people.

Dell stated that customers were lowering their purchases of information technology in the period ending on October 28 and provided a revenue forecast for the current quarter that fell short of analysts’ predictions. When it releases its financial results for the fourth quarter of its fiscal year on March 2, the corporation is anticipated to offer more details on the financial impact of the job layoffs.

In his letter to the staff, Clarke said, “We’ve navigated economic downturns before and we’ve emerged stronger. We will be ready when the market rebounds.”