According to a Bloomberg report, Dell has to lay off about 6,650 employees. This number represents about 5% of the entire workforce of the company. The decision was announced in a memorandum last Monday (6) and according to Dell co-CEO Jeff Clark, the cost-cutting measures were not enough to guarantee the company’s profitability.

Paypall recently announced the layoff of 2,000 employees, and several technology companies started 2023 by laying off their employees. In a statement, Clarke said the hiring suspension, travel restrictions and spending cuts were not enough and that the market situation “continues to worsen with an uncertain future.”

Analyst firm IDC reported that 37% decline in Dell PC shipments, in the last quarter of the year compared to the same period of the previous year. The drop is significant because, according to Bloomberg, 55% of Dell’s total revenue comes from PC revenue.

Co-CEO says layoffs are necessary

The layoffs are essential to the “long-term health and success” of the company, according to Jeff Clark. For him, the reorganization of the department should be seen as an opportunity to increase efficiency and stimulate innovation.

Once the layoffs are completed, the company’s headcount will drop to its lowest level in six years. “We’ve already been through economic downturns and getting stronger, we’ll be ready when the market recovers,” Clarke said. With the economy slowing down and the subsequent drop in demand, many tech companies started the year with layoffs. By all indications, 2023 will also be challenging for the sector and many people will have to face unemployment.

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Source: Bloomberg, The Verge.

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