Data center News
Dell’s 6,650 Layoffs: 5 Big Changes, Cuts, Michael Dell Things To Know
As Dell Technologies reduces its 133,000-strong workforce by 5 percent, CRN breaks down the biggest things channel partners, investors and employees need to know about the cuts and Dell’s vision for the future.
Dell Technologies has some massive changes ahead of it as the infrastructure and PC giant lays off 6,650 employees, or roughly 5 percent of its global 133,000 workforce.
“The steps we’ve taken to stay ahead of downturn impacts, which enabled several strong quarters in a row, are no longer enough,” said Jeff Clarke, vice chairman and co-COO of Dell Technologies, in a letter to employees Monday announcing the layoffs. “We now have to make additional decisions to prepare for the road ahead.”
In a message to all Dell employees titled “Preparing for the road ahead,” Clarke said Dell has been making major changes inside the company as growth declines rapidly in its bread-and-butter PC business. In third fiscal quarter 2023, which ended Oct. 28, 2022, Dell reported consumer PC sales plummeted nearly 30 percent year over year.
There are still many questions that remain regarding Dell’s massive layoff round such as where will the layoffs occur inside Dell? What structural changes are being made? And why didn’t founder, Chairman and CEO Michael Dell make his company’s layoff announcement?
[Related: AWS Earnings Takeaways: Slow 2023 Ahead, Amazon Layoffs]
Before diving into those questions, it’s key to remember that Round Rock, Texas-based Dell Technologies is a market-share leader in storage, server and hyperconverged infrastructure with a long legacy of being a top PC player on a worldwide basis.
The company’s run rate is currently approximately $99 billion.
However, research firm IDC reported a 37 percent decline in Dell’s shipments in fourth-quarter 2022. Dell PC shipments dropped further than all of its competitors, such as Lenovo, HP Inc. and Apple, during the quarter, according to PC data from IDC. Overall, global shipments were down 28 percent in fourth-quarter 2022 compared with fourth-quarter 2021.
Dell is hardly the first technology company to conduct large IT layoffs. For example, Microsoft unveiled 10,000 layoffs, Google will cut 12,000 employees, and fellow PC competitor HP Inc. announced it will lay off up to 6,000 employees by 2025.
CRN breaks down the five most important things channel partners, investors and Dell employees need to know about Dell Technologies’ 6,650 layoffs.