Dell Technologies will reduce about 6,650 jobs, or about 5 percent of its global workforce, hurt by falling demand for its personal computers, Bloomberg News report said.
Dell had about 133,000 employees as of Jan. 28, 2022, of which, about one-third were based in the United States.
Dell is the third largest PC supplier in Q4 2022, according to IDC.
The latest Gartner report on the PC industry said PC shipment will drop 6.8 percent to 267.676 million in 2023 against 16 percent drop in 2022 to 287.159 million.
Through 2023, PC vendors will reduce inventory levels and Gartner analysts expect PC inventory levels will return to normal by the second half of 2023 after significantly increasing in 2022.
“Inventory levels increased due to vendors overestimating market demand and because of the collapse in consumer confidence and dramatic fall in demand,” Ranjit Atwal, Senior Director Analyst at Gartner, said recently.
“The company is experiencing market conditions that continue to erode with an uncertain future,” Dell Technologies co-Chief Operating Officer Jeff Clarke wrote in a memo to its employees.
The previous cost-cutting measures, including a pause on hiring and limits on travel, are no longer enough, Jeff Clarke said in the memo. The department reorganizations and job cuts are an opportunity to drive efficiency, a company spokesperson told Bloomberg News.
Dell had already rolled out cost-cutting moves such as a hiring pause and limits on travel as it dealt with a post-pandemic collapse in PC sales, which account more than half of its revenue. Dell expects to book costs related to the layoffs in its fiscal fourth quarter, which ends in January.
Rival HP has also said it will cut up to 6,000 jobs. The market for PCs and tablets is set for another year of decline in 2023 with a fall of 2.6 percent, according to research firm IDC, after rapid growth during the pandemic on the back of remote working.
