Dell plans to cut 6,650 positions, equivalent to 5% of its worldwide workforce, as the company joins other US technology firms in reducing expenses amid economic instability.
Dell informed its workers that the market conditions have worsened and that previous cost-saving measures, such as stopping new hires and limiting travel, were insufficient.
“What we know is market conditions continue to erode with an uncertain future,”
“The steps we’ve taken to stay ahead of downturn impacts … are no longer enough. We now have to make additional decisions to prepare for the road ahead.”
said Dell’s co-chief operating officer, Jeff Clarke.
Dell employs 133,000 people, with roughly one-third of them located in the US where the company has its headquarters.
Dell’s job cuts were announced amid widespread layoffs in the technology industry, even though the US economy as a whole added 517,000 jobs in January and the unemployment rate decreased to 3.4%.
Despite this, several major US tech companies have implemented cost-cutting measures after acknowledging that they expanded too rapidly during the COVID-19 pandemic, when online activity increased. Companies such as Microsoft, Meta (owner of Facebook), Alphabet (parent company of Google), and Amazon have all announced significant reductions in their workforce.
As per the website layoffs.fyi, which tracks tech industry job losses worldwide, over 290 technology firms have announced 88,000 job cuts in the year so far, compared to nearly 160,000 throughout the whole of 2022.
Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown, a UK investment platform, stated that the increase in interest rates – with the US, UK, and European Central Bank raising borrowing costs – also impacted the business based in Texas.
“The company has been buffeted by the crosswinds unleashed as the era of cheap money came to an abrupt end and sales dropped following the pandemic surge,”
“Many companies brought forward IT purchases during the crisis, as the world shifted to virtual ways of working, which has inevitably had an impact on future budgets. With interest rates hurtling upwards and more firms becoming cautious, there has been a double whammy effect on PC sales.”
said Streeter.
