Dell Technologies is eliminating about 6,650 roles as it faces plummeting demand for personal computers, becoming the latest technology company to announce thousands of job cuts.
Dell Technologies Inc. is eliminating about 6,650 roles as it faces plummeting demand for personal computers, becoming the latest technology company to announce thousands of job cuts.
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. Among major companies, Dell saw the largest decline — 37 per cent compared with the same period in 2021, according to IDC. Dell generates about 55 per cent of its revenue from PCs.
The move “affirms our expectation of a delayed PC rebound in 2023 and suggests further sales erosion in the company’s client solutions group, especially in 2H,” Woo Jin Ho, senior analyst at Bloomberg Intelligence, said in a note. “Though we calculate the move could cut annual expenses by US$700 million-US$1 billion, helping to preserve margin and limiting the dent to EPS, Dell still faces limited visibility in PC demand.
After the reduction, the headcount for Round Rock, Texas-based Dell will be its lowest in at least six years — about 39,000 fewer employees than in January 2020, before the company spun out its stake in VMware. Only about one-third of the company employees are U.S.-based, according to a March 2022 filing.
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