CDW’s bombshell announcement this week that it expects first fiscal quarter results below expectations and the apparent layoff of hundreds of its employees is a sign that moderated technology demand since the height of the pandemic is more than just a one-quarter strain for hardware, software and services businesses.

The Lincolnshire, Ill.-based CDW – No. 4 on CRN’s 2022 Solution Provider 500 list – has cut workers who were with the company for more than 10 years and multiple employees involved with Digital Velocity and Microsoft Azure, according to a review of posts on LinkedIn.

People familiar with the layoffs told CRN that between 3 percent and 5 percent of the company -- between 450 and 750 people -- were let go.

CRN has reached out to CDW for comment. CDW, with 15,100 employees, is slated to report its first fiscal quarter 2023 financial results on May 3.

[RELATED: ‘Sad Day’: CDW Layoffs Hit Hundreds After ‘Economic Uncertainty’ Warning]

CDW Layoffs Amid Reduced Guidance

A Wednesday report from Bank of America noted that this is “the first year of y/y revenue decline since the company went public in 2013.”

“We think the company will face headwinds over the next several quarters as Enterprise IT spend remains uncertain,” according to the report. “Most hardware companies in our coverage have indicated weak enterprise spending. A recovery of PCs in F2H23 remains uncertain while demand for data center equipment could also weaken.”

An analyst with Morgan Stanley wrote in a Thursday report that the CDW news “likely reflect[s] greater large SMB spending caution and deal downsizing/cancellations/pushouts.”

Wednesday reports from William Blair and Credit Suisse, however, were more optimistic.

“CDW’s revenue growth is tied to U.S. IT spending growth, and we continue to believe that CDW is well positioned to outperform that spending benchmark as IT spending shifts to address the future state of work and how businesses interact with customers,” according to the William Blair report. “CDW has a broad selection of vendors, and its scale drives favorable terms and allows the company to take inventory positions through its distribution facilities. While COVID-19 and chip shortages have disrupted global supply chains, similar to past periods of supply constraints, we believe that CDW management remains a strong executor and the company is well positioned to capture market share.”

The report continued to say “CDW has a well-diversified revenue base across several end-markets, which decreases the company’s risk profile. We believe that the company’s increasing success in areas that are outside but supplement client devices (including software, services, and security) is driving growth and profitability.”

The Credit Suisse report said, “We think updated guidance will fairly de-risk 2023 estimates and continue to believe CDW’s strong execution and customer relationships warrant a premium,” although CDW’s stock should “be weak until signs of improving end demand.”

Here’s what else you need to know about the layoffs.