According to its data, the company's staff will be reduced by 5% to 126.3 thousand people, only a third of whom are based in the United States. Thus, the number of staff will fall to its lowest level since 2017.
The reason for the cuts is the economic damage that Dell suffered due to a significant drop in demand for PCs after a sharp rise during the COVID-19 pandemic. Revenues from their sales account for 55% of the company's revenue. According to Dell spokesperson Jeff Clarke, the company is facing "market conditions that continue to deteriorate due to an uncertain future".
According to Bloomberg, after the layoffs, Dell's global workforce will hit its lowest level in six years: about 39,000 fewer positions, down from the 165,000 full-time positions reported in January 2020. "We've faced economic downturns before, and we've grown stronger," Clarke said. "We will be ready when the market recovers."
According to Bloomberg, Dell suffered the biggest loss of any major computer maker. Its revenue in the fourth quarter of 2022 was down 6% from the same period in 2021, and product sales fell 37%. Staff reductions along with departmental reorganisation are expected to improve the company's productivity.
Dell is not the only computer brand affected by the drop in demand for hardware. Back in November, HP announced plans to cut around 6,000 jobs, while Lenovo laid off an undisclosed number of its US employees in December 2022. The broader technology industry has also been hit by the economic downturn due to slow growth, over-hiring and supply chain issues. Meta, Google, Microsoft and Amazon have announced massive layoffs in recent weeks.