PC manufacturer Dell announces 6,650 job cuts, 5 percent of total workforce

Dell Inc.'s offices in Santa Clara, Calif. [AP Photo/Paul Sakuma]

Dell, the multinational personal computer manufacturer and technology corporation, announced mass layoffs on Monday as part of a restructuring plan after a dramatic decline in computer sales in 2022.

Although the number of layoffs have not been disclosed officially by Dell, Bloomberg reported Monday that 5 percent of the company’s global workforce will be eliminated, or approximately 6,650 jobs.

In a post on Monday on the Dell Technologies Blog, entitled “Preparing for the road ahead,” company Vice Chairman and Co-Chief Operating Officer Jeff Clarke said, “Market conditions continue to erode with an uncertain future” and previous steps taken “to stay ahead of downturn impacts” are “no longer enough.”

Clarke said the restructuring will affect the global sales, services and ISG engineering groups within the $30 billion corporation based in Round Rock, Texas. ISG is the division of Dell that provides corporate IT infrastructure and cloud computing solutions.

The Dell corporate executive—who has an estimated net worth of $257.5 million—went on to say, “Some members of our team will be leaving the company” and that making the job cuts was necessary “for our long term health and success.”

While the corporate parent Dell Technologies has other business units in smartphones, televisions, software, network and information security systems, 55 percent of its annual revenue comes from personal computer sales.

With 133,000 employees, Dell is the third-largest manufacturer of personal computers with 17.5 percent of worldwide market shares, behind Lenovo (24.1 percent) and HP (19.4 percent) and ahead of Apple (9.8 percent).

During the pandemic, Dell and other computer manufacturers benefited from a dramatic boom in sales. PC makers reported their fastest sales growth in 20 years at the beginning of 2021, when businesses and schools bought notebook computers in record numbers for employees working and students learning remotely.

According to International Data Group (IDG), a total of 348.8 million PCs were sold in 2021, the largest number since 2012, and a reversal of a years-long decline as consumers and businesses spent more money on smartphones and tablets.

By April 2022, the boom in computer sales was over, and by the end of the year, global PC sales had fallen by 28 percent. While all the other manufacturers experienced declines, Dell’s sales fell the farthest, dropping 37 percent in 2022.

The mass layoffs at Dell are the latest in a series to hit technology workers. Lenovo (6,000 job cuts announced in December) and HP (6,000 job cuts announced in November) had already taken measures in response to the 2022 sales drop. Among the other largest tech layoff announcements have been Alphabet/Google (12,000 jobs), Meta/Facebook (11,000 jobs), Microsoft (10,000 jobs) and Salesforce (8,000 jobs).

On January 31, PayPal announced 2,000 job cuts, or 7 percent of the company workforce. Like all the other corporate executives who have delivered news about layoffs, PayPal President and CEO Dan Schulman said the cause was the “challenging macroeconomic environment,” and that cuts were part of “right-sizing our cost structure” and “focusing our resources on our core strategic priorities.”

Writing as if from the same script, the corporate officers express regret that the layoffs are necessary and pledge to provide assistance to those losing their jobs. In some cases, the executives take personal responsibility for the decisions that did not account for the changes in the business climate.

In every case, the layoffs—which have tragic consequences for those seeking jobs when all the employers are shedding workers—are presented as coming about by unforeseen and inexplicable business circumstances.

However, the deepening mass layoffs in the technology and other industries can be traced directly to government policy and, specifically, the steep interest rate increases of the US Federal Reserve and other central banks over the past year.

These rate increases are designed to impose the inflationary crisis—itself the product of central bank policy of pumping trillions of dollars into the financial system going back to the Great Recession of 2008—onto the working class by driving the economy into recession and deliberately increasing unemployment.