Dan Milmo Global technology editor 

Dell to cut 5% of global workforce as ‘uncertain future’ looms

US-based PC maker makes move in order to reduce costs as ‘market conditions continue to erode’
  
  

Dell logo on smartphone on top of laptop keyboard
Dell is one of a number of technology companies that have implemented cost-cutting plans recently. Photograph: Nikolas Kokovlis/NurPhoto/Rex/Shutterstock

Dell is to cut 6,650 jobs, or 5% of its global workforce, as the PC maker becomes the latest US tech firm to reduce costs amid economic uncertainty.

Dell told employees that market conditions were deteriorating and that initial attempts to save money, such as a hiring freeze and travel curbs, were not enough.

“What we know is market conditions continue to erode with an uncertain future,” said Dell’s co-chief operating officer, Jeff Clarke. “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.”

Dell has 133,000 employees, about a third of whom are based in the US, where the company is headquartered.

The Dell cuts have been announced against a backdrop of widespread lay-offs in the tech sector, despite the wider US economy adding 517,000 jobs in January and the unemployment rate dropping to 3.4%.

However, several big names in the US tech industry have implemented cost-cutting plans after admitting that they grew too quickly during the coronavirus pandemic, when online activity surged. Microsoft, Facebook owner Meta, Google’s parent Alphabet and online retailer Amazon have all announced substantial job cuts.

According to the website layoffs.fyi, which monitors tech industry job cuts globally, more than 290 tech companies have announced 88,000 jobs cuts so far this year, compared with nearly 160,000 for the entirety of 2022.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, the UK investment platform, said rising interest rates – with the US, UK and European Central Bank increasing borrowing costs – had also hurt the Texas-based business.

“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,” said Streeter.

“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.”

 

Leave a Comment

Required fields are marked *

*

*