Dell Cutting 5 Percent of Workforce Amid Downturn

Ryan Morgan
By Ryan Morgan
February 6, 2023Business News
Dell Cutting 5 Percent of Workforce Amid Downturn
The Dell Technologies logo is seen at the Mobile World Congress in Barcelona, Spain Feb. 28, 2018. (Reuters/Yves Herman)

Dell Technologies Inc. is set to cut about five percent of its global workforce, amid an “uncertain future” for the computer company.

Dell has taken several measures in recent months to deal with “market conditions.” Those changes included freezing external hiring, limiting travel, and reducing expenses for outside service. In its latest Securities and Exchange Commission (SEC) filing on Monday, the computer company included a letter to employees, admitting that the “steps we’ve taken to stay ahead of downturn impacts” are “no longer enough” and the company would have to make some “resets.”

“Unfortunately, with changes like this, some members of our team will be leaving the company,” Co-Chief Operating Officer Jeff Clarke wrote in a company-wide memo. “There is no tougher decision, but one we had to make for our long-term health and success. Please know we’ll support those impacted as they transition to their next opportunities.”

Dell had about 133,000 employees as of Jan. 28, 2022, of which, about one-third were based in the United States. The layoffs will thus affect about 6,650 employees in the company, bringing the overall workforce down from about 133,000 employees to about 126,350 employees.

With these latest cuts, Dell’s workforce will be at its lowest level in six years, according to Bloomberg. The Texas-based company will also have about 39,000 fewer jobs than it did in 2020.

The layoffs come as Dell has dealt with a post-pandemic collapse in PC sales, which account for more than half of the company’s revenue.

In November, the company reported its third-quarter revenue was down 6 percent, at $24.7 billion.

Job Cuts Across the Tech Industry

The layoffs at Dell come as technology companies have been cutting tens of thousands of jobs in recent months.

The tech industry cut 97,171 jobs in 2022, an increase of 649 percent over the year prior, Bloomberg reported.

Last month Google began laying off 12,000 workers, or about 6 percent of its workforce. Microsoft also began cutting about 10,000 jobs in January.

In November, Amazon began cutting around 11,000 jobs. The e-commerce company expanded those cuts to around 18,000 jobs in January. The cuts impacted about 1.2 percent of the company’s global workforce of about 1.5 million employees.

In January, Salesforce also began laying off about 8,000 employees, as it cut about 10 percent of its workforce.

The cryptocurrency exchange Coinbase also cut 950 jobs in January, removing about 20 percent of its workforce at the time. It was the second round of job cuts in less than a year.

After recently buying out Twitter, Elon Musk began cutting thousands of jobs. The company has since laid off about half of its workforce. On Sunday, Musk wrote on Twitter that he had saved the social media platform from bankruptcy and the company is “now trending to breakeven if we keep at it.”

Susannah Streeter, a markets analyst for Hargreaves Lansdown said, “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.”

In his company-wide memo to Dell employees, Clarke said the computer company will “prevail” through the current market conditions.

“We’ve navigated economic downturns before and we’ve emerged stronger. We’ll prevail as we always do, for our customers, partners and each other,” Clarke wrote. “We’ll be more competitive, more focused and find a new level of operational performance. We will be ready when the market rebounds.”

NTD News reached out to Dell Technologies Inc. for comment but the company did not respond by the time this article was published.

Reuters contributed to this article.

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