Dell Technologies is the latest tech giant to announce large-scale layoffs, stating that it is cutting 5% of its workforce.
The company cited the “challenging global economic environment” as the reason for the job cuts in a regulatory filing. In a letter to employees, Jeff Clark, Dell’s Chief Operating Officer, stated that the company’s previous cost-cutting measures are insufficient and that further decisions are needed to prepare for the future.
Approximately 6,600 employees will be impacted by the layoffs, with Dell having about 133,000 workers globally according to its most recent annual report from January of the previous year. The company has already put a halt on external hiring, restricted travel, and reduced spending on external services.
The cuts are expected to be completed by the end of April, as per the regulatory filing.
On Monday, after the announcement of the layoffs, Dell’s shares saw a drop of 3.6%, and have declined by 31% in the past 12 months.
In the past year, Dell’s market share in global PC sales has decreased. In Q4 2022, Dell held about 16% of the market, down from 18% in the previous year, according to IDC. This puts Dell behind Lenovo, the top PC maker with 23% of the market, and HP, which holds nearly 20%.
In Q4 of 2022, Dell had net revenue of $24.7 billion, a 6% decrease from the previous year’s $26.4 billion. Meanwhile, its net income from continuing operations dropped 93% from $3.6 billion to $241 million.
Alongside Dell, other tech giants like Alphabet (Google), Amazon, IBM, Meta, Microsoft, and Twitter have recently announced significant layoffs after a rapid expansion during the pandemic. According to Layoffs.fyi, U.S. tech companies have already reported 67,000 job cuts this year.
