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 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.”
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I'd like to see a breakdown of these cuts from divisions/departments. For example, years ago Dell bought out the storage data storage and E-prise management company I worked for for many years, EMC. They have a new industry name for it now APEX I believe. Say for example, how many layoffs are between the personal computer/business workstation divisions and the service and management division(s) like the aforementioned?Reply
No doubt the inflationary cost of components has an impact in sales of new hardware. Another reason for the slower sales is software. Where is that killer app that makes one want to upgrade their computer? Right now, it doesn't exist. Perhaps an artificial intelligence app could make a difference but unlikely. Also, computers have become appliances and most don't change their appliances until they breakdown and need to be replaced.Reply
PCs have become commodity. There’s still the enthusiast crowd but they’re niche.Reply
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”
3 factors explain crashing hardware sales imoReply
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.
It's not just the tech industry cutting jobs. The banking industry, auto industry and many more industries are eliminating thousands of jobs weekly.Reply
Yeah, many factors here. Many, like me, bought or, as I did, built a pc when WFH became the thing.Reply
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.
I am a photographer and sales person at a real estate brokerage. My PC at home is 2012 vintage with some inexpensive upgrades. Works fine. My graphics PC at work is a 2015 vintage with some inexpensive upgrades. The home machine probably will go another 2 years. The machine at work will probably replace it. It will be replaced with a friend 2021 vintage machine with minor updates. My broker and I think alike. We are not in business to make PC companies wealthy. If is still sufficient, why replace it? Likewise my camera is a few years old. A Canon 90D DSLR. People ask why I still use the same camera 3+ years? Why did I not go mirrorless in 10/19 when I bought it? We have a substantial investment in lenses. Many are 10+ years old. They outlived the the 60D that was stolen from my trunk. The 70D that replaced it is still used, but not often. Sometimes my broker uses it. That camera is close to 10 years old. Works fine, just needed 4k video.Reply
My team at work just replaced our desktop machines that we bought in 2017.PlaneInTheSky said:3. PC hardware has become very expensive, which puts pressure on sales.
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.
My current personal laptop is a Lenovo, which I bought (back in 2017) because the Thinkpad brand had a strong reputation for Linux support and I got a sweet deal on an open-box "new" machine.Reply
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.
Ah, and you might find that breaks you. Good image stabilization, autofocus, HDR, modern codecs, and fast transcoding... reasons you might at least need a newer GPU. Maybe a storage upgrades, also.RE Photos said:Works fine, just needed 4k video.
Anyway, good luck.