Dell to Layoff 5% of Its Workforce as PC Sales Drop

The hits to the U.S. technology labor force just keep on coming with Dell on Monday announcing plans to lay off 5% of its workforce, or about 6,650 employees, according to an official document filed with the Securities and Exchange Commission (SEC).

At 14:41 GMT, Dell Technologies Inc is trading $41.29, down $0.95 or -2.25%.

Another Round of Tech Industry Layoffs

Dell’s layoffs announcement marks the latest round of job cuts in the tech industry, as PayPal announced plans to cut 2,000 jobs Tuesday. Earlier in the month, Google announced plans to lay off more than 12,000 workers, Microsoft announced plans to cut 10,000 employees and Salesforce announced plans to lay off 7,000 workers.

Drop in PC and Laptop Demand Reasons Behind the Layoffs

According to CNBC, the cuts at Dell come as demand for PCs and laptops has slowed globally. Global shipments of PCs were down 28% year-over-year in the fourth quarter of 2022, industry analysts at IDC reported.

Computer shipments at Dell were down 37% for that same period, while competitors Lenovo, HP and Apple were down 28%, 29%, and 2% early Tuesday.

Dell Wants to ‘Stay Ahead of Downturn Impacts’

CNBC reported that in a memo to employees, Jeff Clarke, co-chief operating officer at Dell, said the cuts were made in an effort to “stay ahead of downturn impacts.”

He said the changes Dell had already implemented, like limiting travel, pausing external hiring and reducing outside services spending, were no longer sufficient.

“Unfortunately, with changes like this, some members of our team will be leaving the company,” Clarke said. “There is no tougher decision, but one we had to make for our long-term health and success.”

As of Jan. 28, Dell had 133,000 total employees, according to a company filing with the SEC.

In a memo to employees, Clarke said Dell has navigated economic downturns before, and “emerged stronger” as a result.