US tech giant Dell to cut 5% of its global workforce

American computer firm Dell said Monday that it will lay off some five percent of its global workforce, or around 6,650 employees, the latest casualties of a job-slashing wave hitting the US tech sector.

The cuts follow similar steps by tech giants Microsoft, Facebook owner Meta, Google-parent Alphabet, Amazon and Twitter as the industry girds for economic downturn.

They also come after a major hiring spree at the height of the coronavirus pandemic when companies scrambled to meet demand as people went online for work, school and entertainment.

But “market conditions continue to erode with an uncertain future,” said Dell Technologies vice chairman Jeff Clarke in a memo released Monday.

“The steps we’ve taken to stay ahead of downturn impacts –- which enabled several strong quarters in a row –- are no longer enough,” he added.

Dell, based at Round Rock in Texas, had 133,000 employees at the start of last year with nearly a third of them in the United States.

On Monday, Clarke said the company now has to make “additional decisions to prepare for the road ahead.”

He warned of coming changes for the firm’s global sales and services segments, adding that “unfortunately, with changes like this, some members of our team will be leaving the company.”

“There is no tougher decision, but one we had to make for our long-term health and success,” he added.

Dell’s revenue fell six percent in the third quarter of its 2023 fiscal year, according to results released in late November.

Product sales, such as of desktops, laptops and workstations, which represent the bulk of the group’s business activity, fell by 10 percent.

The group’s executives pointed to the decline in demand for personal computers as people in the United States and around the world contend with high inflation and rising interest rates.

But the company has navigated economic downturns before and “emerged stronger” from them, Clarke stressed in the memo.

He added that Dell will “be ready when the market rebounds.”

According to the specialist site Layoffs.fyi, just over 88,000 tech employees have lost their jobs since the beginning of January worldwide, not counting Dell’s announcement on Monday.

© 2023 AFP