Dell Technologies Inc. is laying off around 6,650 workers, or 5% of its global workforce, as it deals with a dip in the personal computer industry and prepares for a possible recession.
Dell’s move on Monday aligns it with a slew of U.S. corporations, from Goldman Sachs Group Inc to Alphabet Inc, that have let off thousands of workers this year to weather a demand slump caused by high inflation and increasing interest rates.
Dell had already implemented cost-cutting measures such as a hiring freeze and travel restrictions as it faced with a post-pandemic slump in PC sales, which account for more than half of its income. However, those moves are no longer sufficient, according to the co-Chief Operating Officer in a memo to employees.
“What we know is market conditions continue to erode with an uncertain future,” Clarke said. Dell expects to register layoff costs in its fiscal fourth quarter, which ends in January.
HP Inc, a competitor, has also announced job cuts of up to 6,000 people. According to research firm IDC, the PC and tablet market would shrink by 2.6% in 2023 after experiencing fast growth during the pandemic due to remote working.
“It was only a matter of time before the wave of tech layoffs reached Dell’s shores, given how sensitive the company is to both consumer and corporate confidence,” said Susannah Streeter, markets analyst, Hargreaves Lansdown.
As of 2013, Dell employed over 133,000 people.