Dell, an American technology company, has decided to lay off some of its employees. Dell becomes the latest tech company to be hit by the layoff wave that has been affecting the ecosystem since the economy became tumultuous.
According to Bloomberg, Dell Technologies Inc would cut 6,650 positions, which amounts to 5% of its global workforce.
“The company is suffering market conditions that “continue to degrade with an uncertain future.” Co-Chief Operating Officer Jeff Clarke said in a memo seen by Bloomberg,
“We’ve been through economic downturns before and come out stronger.” “Clarke stated in the memo to employees. “When the market recovers, we’ll be ready.” When the Covid pandemic hit in 2020, the corporation announced a similar layoff.
According to preliminary statistics from industry analyst IDC, personal computer shipments will drop dramatically in the fourth quarter of 2022. According to IDC, Dell experienced the greatest loss among significant corporations, with a 37% drop compared to the same period in 2021. PCs account for around 55% of Dell’s revenue.
Earlier in November, HP announced that it would remove up to 6,000 positions over the next three years due to decreased demand for personal computers, which has reduced earnings.
Cisco Systems Inc. and International Business Machines Corp. both announced layoffs of approximately 4,000 employees.
According to research company Challenger, Gray & Christmas Inc., the tech sector declared 97,171 job cutbacks in 2022, a 649 percent increase from the previous year.
Dell’s headcount will be the lowest in at least six years after the cuts, with approximately 39,000 fewer employees than in January 2020. According to a March 2022 filing, the corporation employs only approximately one-third of its workforce in the United States.
Due to heightened competitiveness between the two countries, the firm decided on January 15 to limit its reliance on Chinese chips.
This was a setback for China in the chip technology sector, according to Valerio Fabbri of Geopolitica.info.
It declared its intention to lessen its reliance on chips manufactured in China, including those manufactured by international enterprises. The business has stated that it will stop utilizing Chinese-made chips by 2024.
Dell reported a 68 percent increase in quarterly operating profit in November 2022, as robust demand for servers and network equipment offset sluggish PC sales and improving supply-chain challenges helped rein in costs.
Consumer revenue declined by 29%, while large enterprise, or commercial, sales fell by 13%. According to Refinitiv IBES statistics, total revenue fell 6% to $24.72 billion but exceeded projections of $24.54 billion.
The company benefited from a better supply chain, which relieved pressure from increasing component and freight costs, as well as cost-cutting measures including a moratorium on external employment.
According to the corporation, operating expenses decreased by 8% in the third quarter that ended October 28.
Meanwhile, the corporation is likely to reveal additional financial details by March 2023.
