Dell views department reorganizations with job cuts as ways to remain efficient
In the face of the plummeting demand for personal computers, Dell Technologies is reportedly eliminating about 6,650 jobs, thus becoming the latest tech company to announce a job cut affecting thousands of employees.
The company is experiencing market conditions that “continue to erode with an uncertain future,” Co-Chief Operating Officer Jeff Clarke wrote in a memo. Clarke told workers that previous cost-cutting measures, including a stop on hiring and limits on travel, are no longer enough. The department reorganizations, along with the job reductions, are viewed as an opportunity to drive efficiency, the spokesperson said.
According to a company spokesperson, the reductions amount to about 5% of Dell’s global workforce.
After a pandemic-era PC boom, Dell and other hardware makers have seen cratering demand. Industry analyst IDC said preliminary data show personal computer shipments dropped sharply in the fourth quarter of 2022.
Layoffs have crippled the tech sector in recent months, including many of Dell’s peers and competitors. HP Inc. announced in November a reduction of as many as 6,000 workers, while Cisco Systems Inc. and International Business Machines Corp. each said they would eliminate about 4,000 workers. The tech sector announced 97,171 job cuts in 2022, up 649% compared with the previous year, according to consulting firm Challenger, Gray & Christmas Inc.
Dell reported a 6% sales decline in the period ended Oct. 28 and gave a revenue forecast for the current quarter that fell short of analysts’ estimates, saying customers were reducing their purchases of information technology. The company is expected to provide further information on the financial impact of the job cuts when it reports fiscal fourth-quarter results on March 2.
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