Home / News / World /  Dell to layoff about 6,500 employees, cut 5% of its global workforce

Dell Technologies Inc will eliminate about 6,650 jobs, or about 5 percent of its global workforce, Bloomberg has reported on 6 February.

With this, Dell has become the latest tech company to announce layoffs. In a memo viewed by Bloomberg, Co-Chief Operating Officer Jeff Clarke stated, "The company is experiencing market conditions that “continue to erode with an uncertain future."

“We’ve navigated economic downturns before and we’ve emerged stronger," Clarke wrote in his note to employees. “We will be ready when the market rebounds." The company had announced a similar layoff in 2020 when the Covid pandemic had hit.

Also Read: 'Stand in times of challenge...': CEO uses Martin Luther King to defend layoffs, forced to apologise

Industry analyst IDC said preliminary data show personal computer shipments dropped sharply in the fourth quarter of 2022. Among major companies, Dell saw the largest decline with 37 percent as compared with the same period in 2021, according to IDC. Dell generates about 55 percent of its revenue from PCs.

Earlier in November, HP had said that it will eliminate as many as 6,000 jobs over the next three years amid declining demand for personal computers that has cut into profits. Not just this, Cisco Systems Inc. and International Business Machines Corp. each had also said that they would eliminate about 4,000 workers. The tech sector announced 97,171 job cuts in 2022, up 649 percent compared with the previous year, according to consulting firm Challenger, Gray & Christmas Inc.

After the reduction, the headcount for Round Rock, Texas-based Dell will be its lowest in at least six years — about 39,000 fewer employees than in January 2020. Only about one-third of the company employees are US-based, according to a March 2022 filing.

The company on 15 January had decided to reduce its dependence on Chinese chips due to the increased rivalry between the two countries. This came as a setback for China in the chip-technology sector, wrote Valerio Fabbri for Geopolitica.info. It announced that it sought to reduce its reliance on chips made in China, including those made by foreign firms. The company said it will stop using Chinese-made chips by 2024.

In November 2022, Dell posted a 68 percent rise in quarterly operating profit, as strong demand for servers and network equipment cushioned weak PC sales and easing supply-chain pressures helped rein in costs. Consumer revenue tumbled 29 percent and large enterprises, or commercial, revenue, fell 13 percent. Total revenue slipped 6 percent to $24.72 billion but beat expectations of $24.54 billion, according to Refinitiv IBES data.

The company benefited from an improving supply chain that eased pressure from higher component and freight costs, as well as measures to reduce expenses such as a freeze on external hiring.

Operating expenses fell 8 percent in the third quarter ended October 28, the company said. 

Meanwhile, the company is expected to provide further information on the financial impact of the job cuts when it reports fiscal fourth-quarter results on March 2.

(With inputs from agencies)

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