Dell will cut 6,650 jobs, or 5% of its global workforce, as the PC maker becomes the latest US tech company to cut costs amid economic uncertainty.
Dell told employees that market conditions were deteriorating and that initial attempts to save money, such as hiring freezes and travel restrictions, were not enough.
“What we do know is that market conditions continue to erode with an uncertain future,” said Jeff Clarke, Dell’s co-chief operating officer. “The steps we’ve taken to stay ahead of the recession’s impacts… are no longer enough. We now have additional decisions to make to prepare for the road ahead.”
Dell has 133,000 employees, about a third of whom are in the US, where the company is based.
Dell’s cuts were announced against a backdrop of widespread layoffs in the technology sector, despite the fact that the broader US economy added 517,000 jobs in January and the unemployment rate fell to 3.4%.
However, several big names in the US tech industry have implemented cost-cutting plans after admitting they grew too fast during the coronavirus pandemic, when online activity spiked. Microsoft, Facebook owner Meta, Google parent Alphabet, and online retailer Amazon have all announced major job cuts.
According to the website layoffs. for your informationWhich tracks tech job cuts globally, more than 290 tech companies have announced 88,000 job cuts so far this year, compared with nearly 160,000 for all of 2022.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, the UK investment platform, said rising interest rates, with rising US, UK and UK borrowing costs European Central Bank, also hurt the Texas-based business.
“The company has been hit by the crosswinds unleashed when the era of cheap money came to an abrupt end and sales fell in the wake of the pandemic,” Streeter said.
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“Many companies moved ahead with IT purchases during the crisis as the world shifted to virtual ways of working, which inevitably had an impact on future budgets. With interest rates rising and more companies cautious, there has been a double whammy on PC sales.”
