Dell Layoffs: Tech Firm Reduces Global Workforce By About 6,000 Employees

The layoffs follow a period of subdued demand for its personal computers, which has persisted for almost two years and contributed in part to an 11 per cent decline in fourth-quarter revenue

Dell repurchased shares associated with its stake in software producer VMware, facilitating its potential return to the market in 2018 ( Image Source :Getty )

Dell Technologies announced in a regulatory filing on Monday that it has trimmed its workforce as a strategic move to curtail expenses, which involved restricting external recruitment and reorganising employees. According to the company, as of February 2, 2024, the company's employee count stood at nearly 120,000, marking a reduction from approximately 126,000 a year prior, making a job cut of about  6,000, as per a news agency Reuters report.

The layoffs follow a period of subdued demand for its personal computers, which has persisted for almost two years and has contributed in part to an 11 per cent decline in fourth-quarter revenue, as reported last month. Dell also said it anticipates net revenue growth throughout the year in its client solutions group (CSG), which encompasses its PC division. However, in the fourth quarter, the segment's revenue experienced a decline of 12 per cent.

Despite expressing caution regarding the challenges expected in the near future, Dell remains optimistic about the prospect of demand improving and foresees a more competitive pricing environment in fiscal year 2025. Nevertheless, the company acknowledges the anticipated increase in input costs and notes the likelihood of additional complexities arising, “continued reduction of our other businesses' net revenue as a result of the change in our commercial relationship with VMware.”

Dell repurchased shares associated with its stake in software producer VMware, facilitating its potential return to the market in 2018. Last year, chipmaker Broadcom finalised its $69 billion acquisition of VMware.

Dell undertook significant workforce reductions in the previous year, eliminating 6,650 positions. This strategic move came as the company prepared for the possibility of an economic downturn and witnessed a decline in demand for personal computers.

Previously, Dell reportedly communicated to remote workers that while they could continue their work from home arrangements, they would not be eligible for promotions. This marks a shift from its previously embraced hybrid work culture, which had been in place even prior to the onset of the Covid pandemic. The company has now adopted a stringent return-to-office (RTO) policy, categorising employees as either "hybrid" or "remote" workers and informing them of a mandatory return to the office.