Dell, the U.S.-based PC maker, has been making moves to cut costs in the face of an “uncertain future”. Five percent of its global workforce would be reduced. The company understands that “market conditions continue to erode”. In this way, the massive layoffs that technology companies are carrying out in these times continue to grow.
The technology company, born in Austin, Texas, on February 1, 1984, is now headquartered in Round Rock, also in the state of Texas. Dell’s intention is to “eliminate” 6,650 jobs, representing 5% of its worldwide workforce. Thus, the technology company is the latest to announce staff reductions. The background is to be found in the drop in costs within a global economic uncertainty, according to the technology sector.
The company addressed employees to inform them that market conditions are deteriorating. Dell had been working to save money. There it was reported that a hiring freeze and limited travel had been imposed, which was not enough. “What we know is that market conditions continue to erode with an uncertain future,” said Jeff Clarke, Dell’s co-chief operating officer.
PC manufacturer’s decisions
Clarke stressed that “the steps we have taken to get ahead of the impacts of the rescission…are no longer sufficient.” The company’s co-chief operating officer understands that “we now have to make additional decisions to prepare for the road ahead.” The technology company employs some 133,000 people worldwide. Of these, one-third are located in the United States, where Dell is headquartered.
The cuts decided by the company come against a backdrop of widespread layoffs in the technology sector. However, the numbers of the U.S. economy show another reality. The United States, in the month of January, added about 517,000 jobs and its unemployment rate fell below 3.5 percent.
Cutbacks and reconstruction
Several of the biggest names in the U.S. technology industry have been implementing cost reduction plans. For this, it had to be admitted that there was a very rapid growth in activity during the coronavirus pandemic. Firms such as Microsoft, Facebook-owned Meta, Google’s Alphabet, and Amazon have announced major job cuts worldwide.
More than 290 technology companies worldwide have announced job cuts for 88,000 people so far this year. This situation is worrisome in comparison to the nearly 160,000 layoffs in this industry during 2022. Different analysts see, in the decision of these companies, the increase in interest rates and the increase in borrowing costs in several countries of the world as causes.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, a UK investment platform, commented on the Dell case. For Streeter, “the company has been buffeted by the crosswinds unleashed when the era of cheap money came to an abrupt end and sales fell in the wake of the pandemic surge.”