Dell Technologies is laying off 6,650 workers, about five per cent of its total workforce, due to declining PC sales and infrastructure requirements.
The company has already tried to cut costs by pausing hiring and limiting travel before taking the decision to downsize its workforce, Co-Chief Operating Officer Jeff Clarke wrote in a blog post.
“Unfortunately, with changes like this, some members of our team will be leaving the company. There is no tougher decision, but one we had to make for our long-term health and success,” Clark wrote.
In addition to the downsizing, Clarke said the company would introduce a slew of changes that include changing the structure of its sales team and integrating the services division of its consumer and infrastructure businesses.
“Since June, we paused external hiring and reduced spending to navigate a challenging global environment,” a Dell spokesperson said in an email response.
“We have further opportunity to drive efficiency through department reorganisations, which has resulted in a reduction of team members across the globe. This is a difficult decision that was not made lightly, and we’ll support those impacted as they transition to their next opportunity.”
The news was first reported by Bloomberg.
Global PC sales for the quarter ending September declined by 15 per cent year-over-year, while again declining by 28.1 per cent for the quarter ending December, according to IDC. Market research firm Gartner predicts that PC shipments will further decline by seven per cent in 2023.
Dell reported a 29 per cent decrease in consumer revenue for the third quarter ending September, and a six per cent year-over-year decrease in net revenue.
However, Dell is not the only technology company struggling with the decline in PC sales. In November, competitor HP was forced to announce plans to lay off 4,000 to 6,000 employees by the end of fiscal year 2025, reducing its global workforce by about 12 per cent.
HP’s fourth quarter 2022 financial results showed an year-on-year revenue decline of 11.2 per cent to $14.8 billion, with its personal systems, consumer, and commercial segments, as well as the notebook and desktop units reporting decline in sales.
Large technology companies including the likes of Cisco, IBM, Meta, Amazon, Oracle, Google and Salesforce have continued to lay off employees since August last year.
So far in 2023, technology companies have laid off more employees than in any other month since the start of the COVID-19 pandemic.