Layoffs are sweeping across the tech industry as PC sales falter and companies button down for a looming recession. Dell is not immune to these concerns and will lay off 6,650 employees in the coming months. According to Bloomberg, this represents roughly 5% of the company’s global footprint.
Over the past six years, Dell’s global headcount peaked at 165,000 in 2020. However, the latest cuts will see that figure fall to just 126,300 employees.
In a memo to employees (opens in new tab) this morning, Dell Vice Chairman and Co-Chief Operating Officer Jeff Clark stated, "What we know is market conditions continue to erode with an uncertain future. The steps we’ve taken to stay ahead of downturn impacts – which enabled several strong quarters in a row – are no longer enough."
Dell will streamline its operations, including realigning its Regional Sales and Dell Technologies Select teams reporting to one “leader” as a cost-efficiency measure. Changes are also being made to the Infrastructure Solution Group and Client Solution Group to reduce customer service costs.
Clarke added that while Dell will be sad to see valued employees leaving the fold, he added that it was a tough decision “we had to make for our long-term health and success.”
According to IDC, global PC shipments cratered 28 percent in Q4 2022 compared to the same period in 2021. Shipments of desktops, laptops, and workstations fell to just 67.2 million units for the quarter. At the time, the research firm claimed that “the pandemic boom is over for the PC market.
Dell is not alone in widespread layoffs in tech. Microsoft will eliminate 10,000 positions during 2023 after quickly ramping up hires during the pandemic. Hewlett-Packard said it would part ways with 6,000 employees in November 2022, and Lenovo announced layoffs across its U.S. workforce in December.
According to Bloomberg Intelligence senior analyst Woo Jin Ho, Dell’s actions could “cut annual expenses by $700 million to $1 billion, helping to preserve margin and limiting the dent to EPS.”
I buy a new computer maybe every 10 years based solely on what I need to work and nothing more so I don’t have any concerns about video cards or any other expensive stuff
as a society in the west, we buy too much stuff, especially stuff We don’t need. And other countries suffer because of it—literally surrounded by a sea of garbage.
in the words of Dave Mason, “you shouldn’t have took more than you gave”
People who needed to work from home already bought a PC during the pandemic.
PC are good enough, there is very little reason to upgrade unless you are a gamer playing at 4k or editing 4k video.
PC hardware has become very expensive, which puts pressure on sales. TSMC and Samsung's duopoly are driving up prices of GPU.
I no longer need anything for my setup. So tech companies, just as any other company, needs to cut labor when revenues start to drop.
The old spec:
32 GB memory
512 GB NVMe SSD
4 TB HDD
Price: somewhere between $2100 and $2200 (I don't remember exactly, but definitely in this range)The new spec:
64 GB ECC memory
1 TB NVMe SSD
4 TB SATA SSD*
Price: $1890 + $329* = $2219Both machines were Dell Precision branded business machines. The 4 TB SSD* was purchased from a separate online store, since Dell adds such a big markup for these things and I'm not sure they even offered a 4 TB SATA SSD option for it.
But, I guess that probably says more about Dell's margins eroding than hardware prices, since we know at least the cost of the CPU and motherboard have gone up.
After Dell's recent announcement that they're transitioning their supply chain away from China, I plan to replace it with a Dell. Unfortunately for Dell, I have no immediate need to replace that machine.
Anyway, good luck.