The Austin, Texas-based business is planning to reduce its workforce by 5%, according to reports by Bloomberg, representing a cut of over 6,000 jobs. The action makes Dell the latest IT business to shrink its workforce in 2023.
This follows a similar trend by Microsoft, Google and Salesforce in January, 2023. As one of the largest computer manufactures worldwide, you might be wondering why Dell have suddenly decided to do this. If so, look no further because in this blog we will outline this.
Why Dell have done this
Dell technologies have claimed this was an action to counter their rising costs, despite implementing numerous cost-cutting strategies in the last few years.
The short answer of Dell’s cost-cutting? Sudden downturn in the computer market. Specifically, Dell officially reported a 6% decline in revenues to £20.5 billion in the three months. If we look at Dell’s sales reports, it’s clear that PC shipments in particular have decreased by 37% since the end of 2022.
This was reported from Industry Analyst- IDC. Additionally, Dell Co-Chief Operating Officer- Jeff Clarke- said that this action was taken because market conditions “continue to erode with an uncertain future.”
What is the main cause for this?
On the other hand, what caused the drop in PC shipments? We can see that this drop started post-pandemic. Furthermore, this follows the trend of remote working increasing since early 2022.
Our guess is that this increase along with the unstable economy has put increased pressure on the market. I’d also consider that this isn’t just exclusive to Dell- Lenovo, Apple, HP and others are following the same course.
Implications for us?
Dell has over 2,220 staff in the UK, according to its most recent report. That would be equal to 110 job cuts in the UK if the workforce was slashed by 5%. However, Dell was unable to confirm the scale of the impact to UK employees.
We also have to consider to bigger picture of unemployment worldwide. There have been over 88,000 tech layoffs worldwide in the first few weeks of 2023, according to a tracking site called layoffs.fyi. Of course, this is quite a scary figure considering the current economy. It also means that Dell products and suppliers will raise their prices to combat profit loss.
Conclusion
This concludes our blog on Dell’s latest power-play to combat their costs and market downturn. We hope you found this interesting, if so, be sure to stay up to date on our site for new blog releases- covering everything from relevant IT news to factual knowledgebase material.
Plus, on the topic of the increase in Remote working, we offer flexible services towards Secure Remote Working that can help your business adapt to the changing climate in businesses world-wide in Cyber-safe fashion.
