The global technology industry has witnessed an unprecedented wave of layoffs in the past few months affecting some of the most prominent players in the sector. Companies that have had to cut thousands of jobs in the recent past include the likes of Google, Microsoft, HP, Amazon, Spotify, and Meta. Social media platform Twitter also announced a major round of layoffs after Elon Musk took over the website in late 2022. These cutbacks have come as a shock to thousands of employees, leaving many to question the stability of the tech industry and its role in the current economic landscape.
The latest company to announce similar cutbacks is Dell, the American multinational computer technology company famous for its computers and laptops. On Monday, February 6, 2022, Jeff Clarke, the Vice Chairman and Co-Chief Operating Officer at Dell, announced that it is taking some “tough” decisions that would involve “some members of the team leaving the company” for the sake of the Dell’s “long-term health and success.”
Clarke announced the decision to lay employees off via an internal memo which was subsequently published in the Dell Technologies Blog. While the blog post did not reveal how many employees will be affected by the decision, a Bloomberg report claimed that nearly 6,650 employees — nearly 5% of Dell’s global workforce — will be affected by the decision.
Slowing economy, falling demand for PCs and laptops to blame?
After experiencing a sales boom during the COVID-19 pandemic, computer makers around the world have been facing a massive slump in demand for new computers and laptops. Making things even worse for these companies was the worldwide recession accelerated by the complications caused by the ongoing Russo-Ukrainian conflict.
Being one of the biggest makers of PCs in the world, Dell was arguably one of the worst affected by these issues. Data from analytics firm IDC indicates that Dell witnessed a massive 37 percent decline in shipment figures in the recent holiday quarter. Given that a majority of Dell’s revenue came from PC sales, the company was almost forced to take action. Dell, which reported more than 165,000 employees in January 2020, has laid off more than 39,000 employees in the past two years. Dell’s current employee count is, in fact, at its lowest in more than six years, the Bloomberg report adds.
While Clarke did not share details surrounding the severance package being offered to the affected employees, he did confirm that the company will “support those impacted as they transition to their next opportunities.” Clarke went on to add that Dell has “navigated economic downturns before” and has emerged stronger in the past. His company, he said, will be ready when the market rebounds and things return to normalcy.