Dell To Cut Thousands Of Jobs Amidst PC Demand Slump

Dell is to cut about 6,650 jobs, or roughly 5 percent of its workforce, as it faces plummetting demand for PCs.

Co-chief operating officer Jeff Clarke wrote in a memo to staff that the company was experiencing market conditions that “continue to erode with an uncertain future”.

Computer makers and vendors of online services and consumer electronics experienced a boom for two years during the pandemic, but this has turned into a slump in recent months as consumers and businesses cut spending amidst soaring inflation and interest rates.

In January 2022 IDC found PC sales during 2021 had reached their highest level since 2012, but shipments continued to drop through 2022 and again fell sharply in the fourth quarter.

Post-pandemic slump

The analyst firm said Dell saw the largest fourth-quarter decline amongst major PC makers, with a 37 percent drop compared to the same period a year earlier, according to preliminary figures.

Last week Gartner found PC sales declined 16 percent overall last year compared with 2021 and predicted a further drop of 6.8 percent in 2023.

Dell has significant exposure to the market, generating about 55 percent of its revenue from PCs.

Clarke said previous cost-cutting measures such as a hiring freeze and limits on travel were no longer enough.

‘We will be ready’

“We’ve navigated economic downturns before and we’ve emerged stronger,” wrote Clarke. “We will be ready when the market rebounds.”

Competitor HP in November announced it would cut up to 6,000 staff, while Cisco Systems and IBM have each said they plan to fire about 4,000 workers.

Facebook parent Meta, Microsoft, Google parent Alphabet and other major tech companies have also announed thousands of layoffs each.