[Asia Economy New York=Special Correspondent Joselgina] Amid repeated warnings of an economic recession, Dell Technologies has joined the ranks of large-scale layoffs following Microsoft and Alphabet.
Dell Technologies announced on the 6th (local time) through a filing with the U.S. Securities and Exchange Commission (SEC) that it plans to lay off about 5% of its total workforce. Considering Dell's employee count was 133,000 as of January last year, approximately 6,650 employees are expected to be laid off.
This decision comes as global demand for PCs and laptops slows down. Economic media CNBC reported, citing IDC, that worldwide PC shipments in the fourth quarter of last year decreased by 28% compared to the same period the previous year. During this period, Dell's shipment volume shrank by as much as 37%. Additionally, concerns about a recession have increased as central banks around the world, including the Federal Reserve (Fed), simultaneously raised interest rates to curb inflation.
Jeff Clark, Co-Chief Operating Officer (COO), explained in an internal memo that this layoff decision is to get ahead of the impact of the economic downturn. Clark stated that although cost-cutting measures such as halting new hires, restricting employee travel, and reducing external service expenditures were implemented, these alone were not sufficient. He added, "The market situation continues to weaken toward an uncertain future," and "This is something we must do for the long-term health and success of the company." Dell also plans to reorganize its company structure, including sales, customer support, product development, and engineering.
In the United States, as recession warnings grow louder, restructuring moves such as layoffs have been continuing mainly among tech companies since the second half of last year. Microsoft, the third-largest company by market capitalization, announced last month that it would lay off 10,000 employees, equivalent to 5% of its total workforce. Google’s Alphabet also recently revealed plans to cut 12,000 jobs, the largest in the company's history.
Meanwhile, on the afternoon of the same day, Dell's stock price on the New York Stock Exchange was trading at more than 2.8% lower than the previous close.
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