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What just happened? Add Dell to the growing list of tech companies that have announced layoffs in recent months. Co-Chief Operating Officer Jeff Clarke highlighted some of the steps Dell has already taken to help deal with the current global economic environment including limiting travel, reducing spending on outside services and pausing external hiring, but warned that more changes are needed to continue to successfully navigate an uncertain market. Ultimately, it means that some employees will be leaving the company.
Clarke did not say how many team members would be impacted by the changes but according to Bloomberg, Dell is eliminating around 6,600 jobs or around five percent of its global workforce. The executive said the changes will help Dell reduce complexity, increase speed and accelerate innovation, and added that the company would support those impacted as they look for work elsewhere.
Woo Jin Ho, a senior analyst with Bloomberg Intelligence, believes the job cuts could help Dell reduce annual expenses by up to $1 billion.
Share value in Dell is down 3.8 percent on the news as of writing.
Big tech has been on a steady diet of layoffs as of late and it seems that few are immune to the growing trend. In virtually every instance, it all goes back to excessive hiring practices during the pandemic spurred by the sudden shift in how and where people worked. Now that demand for PCs and other electronics has cooled, companies no longer need the extra help.
Last month, market research firm IDC said global shipments of PCs were down 28.1 percent in the fourth quarater compared to the previous year. TrendForce, meanwhile, saw DRAM and NAND flash prices drop 23 percent and 28 percent, respectively, during the same period. The firm anticipates continued cuts over the coming months. Hard drive shipments were nearly cut in half in 2022, although encroachment by SSDs also played a major role. Even peripheral makers like Logitech are feeling the squeeze.
Image credit: Brent Lewin, Its me Pravin