Dell Technologies recently announced that it will be laying off 6,650 employees, or approximately 5% of its global workforce of 133,000. The move is a response to the rapid decline in growth in the company’s PC business, which saw a 30% decrease in consumer PC sales in the third fiscal quarter of 2023. This article will provide insights into the reasons behind the layoffs, and what channel partners, investors, and employees need to know.
What Dell Technologies Investors and Employees Need to Know
Market Share Leader
Despite the layoffs, Dell Technologies remains a market-share leader in storage, servers, and hyperconverged infrastructure. With a run rate of approximately $99 billion, the company is still a major player in the industry.
Decline in PC Shipments
Research firm IDC reported a 37% decline in Dell’s shipments in the fourth quarter of 2022. This drop was higher than the decline seen by competitors such as Lenovo, HP Inc., and Apple.
Part of a Larger Trend
Dell is not the first technology company to conduct large IT layoffs. Microsoft, Google, and HP Inc. have all announced layoffs in recent years.
What Channel Partners Need to Know
The layoffs will result in structural changes within Dell Technologies. The company has not yet announced the details of these changes, but channel partners should be aware that they may affect their relationship with Dell.
Preparing for the Road Ahead
The layoffs are part of Dell’s efforts to prepare for the road ahead. The company is responding to the rapid decline in growth in the PC business and will be making changes to stay ahead of any downturn impacts.
History of Dell Technologies
Dell Technologies is a multinational technology company that was founded in 1984 and has since become a major player in the computer industry. The company went public in 1988 and was later taken private in 2013 by its founder Michael Dell. In 2018, Dell Technologies re-entered the stock market with a stock exchange transaction that combined the shares of Dell and its then-publicly traded subsidiary, VMware.
Over the years, Dell Technologies has seen its share price rise and fall along with the fluctuations of the stock market. In recent years, the company has faced challenges in its personal computer (PC) business due to declining demand, leading to job cuts and changes in strategy. Despite these challenges, Dell Technologies remains a market-share leader in storage, servers, and hyperconverged infrastructure. The company has a run rate of approximately $99 billion, and its shares are traded on the New York Stock Exchange under the symbol DELL.
In conclusion, Dell Technologies’ 6,650 layoffs are a response to the rapid decline in growth in the company’s PC business. Despite the reductions, Dell remains a market-share leader in storage, servers, and hyperconverged infrastructure. Channel partners, investors, and employees should be aware of the structural changes that will result from the layoffs and that the company is taking steps to prepare for the road ahead.
The tech industry has seen a trend of job cuts in recent months, with companies like IBM, Cisco, and HP Inc also announcing layoffs. This move by Dell is expected to result in the company having the lowest headcount in at least six years once the cuts take effect. The stock is down nearly 1% in pre-market trading on Monday. Despite the current uncertainty, Dell remains a market-share leader in storage, server and hyperconverged infrastructure, with a legacy of being a top PC player on a global scale. The company’s current run rate is approximately $99 billion.