PC maker Dell to lay off 6,650 employees

Personal computer maker Dell Technologies is laying off 6,650 of its nearly 133,000 employees, about 5 per cent of the total workforce, as it restructures amid a slowing global demand for PCs.

The Texas company said it aimed to align its investments more closely with its strategic and customer priorities.

Dell "continues to take prudent steps in light of a challenging global economic environment", the company said in a regulatory filing.

Dell expects to recognise expenses associated with these actions in the fourth quarter of fiscal 2023, which ended last month.

“There is no tougher decision but one we had to make for our long-term health and success,” Jeff Clarke, Dell’s vice chairman and co-chief operating officer, said in a memo to employees.

The company has also paused external hiring and reduced its spending on travel and outside services.

This will help the company “navigate the challenges of the global economic environment and uncertainty ahead".

“Market conditions continue to erode with an uncertain future," Mr Clarke said.

"The steps we have taken to stay ahead of downturn impacts — which enabled several strong quarters in a row — are no longer enough.

"We now have to make additional decisions to prepare for the road ahead."

As of January 28, 2022, Dell had 133,000 employees, according to a company filing.

The job cuts at Dell come as demand for PCs and laptops has slowed worldwide.

Global shipments for PCs fell below expectations in the fourth quarter of 2022 as 67.2 million devices were shipped, down 28.1 per cent from the prior year, according to the International Data Corporation in Massachusetts.

Dell sold 10.8 million PCs in the October-December period, an annual drop of 37.2 per cent, IDC found. The company’s market share shrank to 16.1 per cent in the last quarter of 2022 from the same period the year before.

Dell reported $24.7 billion revenue, a 6 per cent annual drop, in its third quarter of fiscal 2023 that ended on October 28.

Dell's layoffs mirror those of other tech companies, including Meta, Amazon, Microsoft, PayPal, Spotify and Google's parent Alphabet, which have cut thousands of jobs amid rising interest rates and growing fears of a recession in the US, after boosting hiring at the height of the Covid pandemic.

Companies in the US let go of 363,824 workers in 2022, 13 per cent more than 2021.

The technology sector was the leading job-cutting industry last year, according to Chicago-based global employment company Challenger, Gray and Christmas.

A total of 97,171 tech jobs were cut last year, a 649 per cent increase from firings in the industry in 2021 — the highest since the dot-com crash that started in 2000, according to a survey by the company.