Dell is following in the footsteps of the wider tech industry and is laying off around 6,600 positions. The company is citing a reduced demand for PCs—as well as the economy—for the decision.
According to Bloomberg, the cuts will amount to about 5% of the company’s workforce. Likewise, the company’s workforce will be reduced to roughly 126,000 global employees, which would be its lowest since 2017. According to Dell co-CEO Jeff Clarke, the company tried alternative measures, like a hiring freeze and limits on traveling, before deciding to make employee cuts.
“We’ve navigated economic downturns before and we’ve emerged stronger,” Clarke wrote to Dell employees according to a company spokesperson as reported by Bloomberg. “We will be ready when the market rebounds.”
A spokesperson from Dell told Gizmodo in an email:
Dell continuously assesses our business to ensure we’re set up to deliver the best innovation, value and service to our customers and partners. This is especially important as economic uncertainty has continued. Since June, we paused external hiring and reduced spending to navigate a challenging global environment. We have further opportunity to drive efficiency through department reorganizations, 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.
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Texas-based Dell has been facing economic pressures like the rest of the tech industry, but its struggles are compounded since the company deals primarily in hardware sales. PC and accessory sales boomed during the height of the covid-19 pandemic as most were relegated to working from home, but the pandemic-fueled growth obviously couldn’t last. As such, PC sales have plateaued and Dell is feeling the heat.
Dell competitor HP announced plans to lay off employees in November, citing similar circumstances. HP’s fiscal year net revenue for 2022 fell 0.8% year-over-year. Intel has also made moves to try and cut costs by cutting the pay of certain higher level employees. The company cut Principal Engineer salaries 5%, VP salaries 10%, executive leadership salaries 15% and the CEO’s salary 25%.
The tech industry, both legacy companies like Dell and companies like Google, has been pulling the trigger on laying off employees in recent months citing some version of “the economy.” As these companies sought to cash in on pandemic-fueled growth, which would inevitably taper off shortly after 2020, employees are now paying the price.
Update February 6 10:25 a.m. EST: This article was updated to include comment from Dell.