Dell, based in Round Rock, Texas, has disclosed that it will lay off about 6,650 workers as a result of the decline in demand for personal computers.

According to the company’s data, the job cuts are expected to affect about 5 percent of its global workforce. Dell Technologies’ Co-Chief Operating Officer Jeff Clarke said that the company is experiencing market conditions that “continue to erode with an uncertain future”.

Dell had about 133,000 employees as of early last year and the company’s headcount will be the lowest in 6 years after the layoffs are complete. The layoffs come amid the ongoing challenges in the personal computer industry. In a memo to staff, Clarke said, “We’ve navigated economic downturns before and we’ve emerged stronger. We will be ready when the market rebounds.”

The company face tough market conditions with an uncertain future and its previous cost-cutting measures were no longer enough, Co-Chief Operating Officer Jeff Clarke iterated. The latest department reorganisations and job cuts are an opportunity to drive efficiency, a company representative said.

“We continuously evaluate operations to ensure the right structure is in place to provide the best value and support to partners and customers. This is part of our regular course of business,” a Dell spokesperson said.

Personal Computer Shipments Drop

According to preliminary data from industry analyst IDC, personal computer shipments dropped sharply in the fourth quarter of 2022. Dell saw the largest decline— 37 per cent compared with the same period in 2021. Dell generates about 55 per cent of its revenue from personal computers (PCs). In 2020 also, Dell announced a similar layoff when the Covid pandemic hit.

The broader tech industry has also been impacted by a downturn in the economy as a result of slow growth, over-hiring, and supply chain issues. While recent attention has been on mass layoffs at technology giants such as Alphabet and Meta Platforms META –1.19%, which came after hiring sprees during the Covid-19 pandemic, hardware makers are also cutting back despite their relatively slower workforce growth in recent years.

In November, HP also said that it will cut 6,000 jobs over the next three years amid declining demand for personal computers that cut into their profits. Apart from this, Cisco Systems Inc and International Business Machines Corp also said they will let go of about 4,000 workers.

Lay-offs in the US hit more than a two-year high in January, as the technology industry, once a reliable source of employment, cut jobs at the second-highest pace on record – to brace for a possible recession, a report showed on Thursday 2nd February, 2023.

Companies including Google, Amazon, and Meta are now grappling with how to balance cost-cutting measures with the need to remain competitive, as consumer and corporate spending shrink amid high inflation and rising interest rates, after the pandemic.

Chief executive Mark Zuckerberg said recent job cuts had been “the most difficult changes we’ve made in Meta’s history”, while Twitter cut about half its staff after multi-billionaire Elon Musk took control, in October.