Dell Technologies has downsized its workforce as part of a broader cost-cutting initiative.
The company cut 6,650 jobs amid concerns about a potential recession and declining demand for personal computers.
As of February this year, Dell had approximately 120,000 employees, from about 126,000 a year earlier.
As part of its downsizing initiatives, the company has involved measures like limiting external hiring and reorganizing employees.
The company disclosed this in a filing on Monday.
Slow demand for personal computers
The layoffs were prompted by sluggish demand for its personal computers over nearly two years, contributing to an 11% revenue decline in the fourth quarter earnings reported last month.
Dell however anticipates net revenue growth in its client solutions group (CSG), which includes PCs, for the entire year, despite a 12% revenue decline in the fourth quarter.
The company is still hopeful that demand will rebound with a more competitive pricing environment in FY 2025, although short-term challenges were acknowledged.
Also, the company foresees rising input costs and expects a “continued reduction of our other businesses’ net revenue” due to changes in its commercial relationship with VMware.
In 2018, Dell repurchased shares linked to its interest in software maker VMware, enabling its return to the market.
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Return-to-work model
Employees of the company have been experiencing growing discontent with the contentious return-to-office policy,
Previously known for its hybrid work culture, Dell had revised its remote work policy, requiring remote workers to adopt a hybrid model to be eligible for promotions. Under this model, employees must spend at least three days a week in an office, raising concerns among workers regarding career advancement and flexibility.
Conversely, a Bloomberg study reveals that companies offering flexible work-from-home arrangements have experienced significantly faster revenue growth compared to those that do not. The study indicates that companies granting full flexibility in remote work locations witnessed a 21% increase in sales between 2020 and 2022. In contrast, companies employing hybrid or fully onsite work arrangements saw only a 5% revenue growth during the same period.
Widespread layoffs
Dell is not alone, the broader tech sector have experienced widespread layoffs. Google laid off approximately 1,000 employees this year, following a workforce reduction of around 12,000 in 2023. Microsoft terminated 1,900 employees in 2024, while Germany-based software giant SAP cut about 8,000 jobs. Overall, layoffs in the tech industry have surpassed 50,000 employees in 2024 thus far.
