Amid Slowing PC Demand, Dell Lays Off 6,650 Employees

[AleksandarK]

Dell, the global PC conglomerate, is reportedly cutting the number of its employees. The alleged move is a direct response to the economic downturn caused by declining demand for PCs, which is Dell's primary source of revenue. According to Bloomberg Intelligence, Dell is laying off about 5% of its global workforce, representing 6,650 employees from its offices. As the source notes, Dell is going under re-evaluation of its operations, and the employee headcount reduction is the affected area that will benefit the company an estimated 700 million to one billion US Dollars, as analysts predict.

IDC notes that shipments of Dell PCs have experienced the most significant decline of 37% in Q4 of 2022, compared to the same period in 2021. And given a considerable downturn, Dell's 55% of revenue from PCs is poorly affected. The company is now joining others in big tech in performing layoffs to keep profits afloat.



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[Karti]

"[...] The alleged move is a direct response to the economic downturn caused by declining demand for PCs, [...]"

Curious is one of the reasons for that decline, is that people stopped to give a damn duo crazy inflated prices of PC parts...
It is me or still most of (if not all) "computer companies" think they are still in the "covid crazy mining era" when people going to buy anything for overinflated price.

Remember dear customers - vote with your wallets

 

[[XC] Oj101]

"[...] The alleged move is a direct response to the economic downturn caused by declining demand for PCs, [...]"

Curious is one of the reasons for that decline, is that people stopped to give a damn duo crazy inflated prices of PC parts...
It is me or still most of (if not all) "computer companies" think they are still in the "covid crazy mining era" when people going to buy anything for overinflated price.

Remember dear customers - vote with your wallets

It's more than that. People are feeling the pinch in general, meaning less frequent upgrades even at the older, lower prices. Combine that with newer, higher prices and it's a recipe for disaster.

Adapting to the market is also something many companies refuse to do. I've done a full pivot with mine, with my target market now being the SOHO sector. 2+ years ago my target market was enthusiasts and top sellers were RTX 2060-2080s, Core i7/i9s, etc. Back then I wouldn't want to sell a laptop regardless of spec, my top sellers these days are Celeron - Core i3/Ryzen 3 laptops. Without the pivot, I would have liquidated long ago instead of grown. It's not quite the GPU peak of mid 2021, but that was an anomaly and I'm larger than I was before the peak.

I wonder what the total count of retrenchments is between all companies in the IT sector (MS, Google, Dell, Intel etc). I wouldn't be surprised if it's near or greater than 100,000. You have to wonder where those people are going to work, considering most companies are downsizing.

 

[SOAREVERSOR]

It's more than that. People are feeling the pinch in general, meaning less frequent upgrades even at the older, lower prices. Combine that with newer, higher prices and it's a recipe for disaster.

Adapting to the market is also something many companies refuse to do. I've done a full pivot with mine, with my target market now being the SOHO sector. 2+ years ago my target market was enthusiasts and top sellers were RTX 2060-2080s, Core i7/i9s, etc. Back then I wouldn't want to sell a laptop regardless of spec, my top sellers these days are Celeron - Core i3/Ryzen 3 laptops. Without the pivot, I would have liquidated long ago instead of grown. It's not quite the GPU peak of mid 2021, but that was an anomaly and I'm larger than I was before the peak.

I wonder what the total count of retrenchments is between all companies in the IT sector (MS, Google, Dell, Intel etc). I wouldn't be surprised if it's near or greater than 100,000. You have to wonder where those people are going to work, considering most companies are downsizing.

If you read between the lines it's not just PCs it's also their services. Dell ramped up their services with the pandemic because the real money is not in hardware, it's in services. With the pandemic ending all these companies need to lay off staff as their clients are hiring internally now.

 

[Chaitanya]

Do these include the stupid d*****s executives who keep insisting on using ancient cases along with spending tonnes of money on non-standard parts?

 

[lemonadesoda]

When cash and profits are high, spending on IT is easy because of quick tax write offs. Every employee likes a new computer even if 99% of what they do is productivity software entry and they don’t really need a new computer. CFOs dont need tax avoidance strategies next year, they need to defend the balance sheet, minimize losses, and any investments will be on revenue generators, not support infrastructure cost centres. And all those laid off staff? What to do with their laptops?

 

[[XC] Oj101]

When cash and profits are high, spending on IT is easy because of quick tax write offs

This is very true. I've worked at a place in the past that would keep spare computers, monitors and peripherals on hand in case of new staff. Three years down the line (in SA, the tax write-off is 33.3% per year) all those spares would be replaced even if they were still sealed.

 

[mb194dc]

Sign of the times unfortunately.

 

[SOAREVERSOR]

Do these include the stupid d*****s executives who keep insisting on using ancient cases along with spending tonnes of money on non-standard parts?

Let me guess, you are a gamer and thus have no idea how things work in the real world.

That's not their problem. The reality is that everyone ramped up a ton of IT spending during the pandemic and grabbed everything they could. So companies hired more people to handle it. That's over now. Which means the entire tech sector needs to bleed like mad for years to get back down to size for what's needed. Everyone in IT is going to take a pay cut, shipments will go down, don't work in a critical position, fuck you fired and go now.

It's how things go. Ramp up when in need, ramp down when in not. We use lenovo and apple products here but Dell and Cisco for the backbone and services. All this went to OVER 9000 during the pandemic. That's gone and we have tons of stuff and more staff now. So we aren't buying shit now despite having billions in cash, we also cut tons of service contracts. All of that, means jobs lost. None of it has to do with cases and other stuff PC "enthusiasts" or "gamers" care about. I don't need half of the services I did need and I'm not alone so sorry, you're out of a damn job. I also have laptops for the next two upgrade cycles so sorry you are out of a job as well. I don't need the amount of VPN and other licenses I had so sorry you are out of a job as well. We probably don't need three me's so sorry me I might be out of a job as well.

We are in a huge growth moment and the lowest unemployment in 50+ years but the overly inflated in employment, salary, benefits, tech sector is going to take a massive hit. Such is life.

 

[TheinsanegamerN]

It's more than that. People are feeling the pinch in general, meaning less frequent upgrades even at the older, lower prices. Combine that with newer, higher prices and it's a recipe for disaster.

Adapting to the market is also something many companies refuse to do. I've done a full pivot with mine, with my target market now being the SOHO sector. 2+ years ago my target market was enthusiasts and top sellers were RTX 2060-2080s, Core i7/i9s, etc. Back then I wouldn't want to sell a laptop regardless of spec, my top sellers these days are Celeron - Core i3/Ryzen 3 laptops. Without the pivot, I would have liquidated long ago instead of grown. It's not quite the GPU peak of mid 2021, but that was an anomaly and I'm larger than I was before the peak.

I wonder what the total count of retrenchments is between all companies in the IT sector (MS, Google, Dell, Intel etc). I wouldn't be surprised if it's near or greater than 100,000. You have to wonder where those people are going to work, considering most companies are downsizing.

Most of the people beign laid off are not the techie types. You can go look at twitter, facebook, et al and most of them still have open positions for productive work.

The departments suffering the brunt of the cuts are the DEI/ESG departments. They'll move to another sector that needs some dead weight to make themselves look good.

 

[neatfeatguy]

The company is now joining others in big tech in performing layoffs to keep profits afloat.

When it's worded like this it makes it sound like the company is looking to be in the red and they're panicking to make sure they avoid that so they're dumping staff.

 

[TheinsanegamerN]

When it's worded like this it makes it sound like the company is looking to be in the red and they're panicking to make sure they avoid that so they're dumping staff.

I mean, that is what they're doing, is it not? Lots of tech companies have had bad quarters, dell is likely looking to trim the fat before that happens.

 

[mb194dc]

Let me guess, you are a gamer and thus have no idea how things work in the real world.

That's not their problem. The reality is that everyone ramped up a ton of IT spending during the pandemic and grabbed everything they could. So companies hired more people to handle it. That's over now. Which means the entire tech sector needs to bleed like mad for years to get back down to size for what's needed. Everyone in IT is going to take a pay cut, shipments will go down, don't work in a critical position, fuck you fired and go now.

It's how things go. Ramp up when in need, ramp down when in not. We use lenovo and apple products here but Dell and Cisco for the backbone and services. All this went to OVER 9000 during the pandemic. That's gone and we have tons of stuff and more staff now. So we aren't buying shit now despite having billions in cash, we also cut tons of service contracts. All of that, means jobs lost. None of it has to do with cases and other stuff PC "enthusiasts" or "gamers" care about. I don't need half of the services I did need and I'm not alone so sorry, you're out of a damn job. I also have laptops for the next two upgrade cycles so sorry you are out of a job as well. I don't need the amount of VPN and other licenses I had so sorry you are out of a job as well. We probably don't need three me's so sorry me I might be out of a job as well.

We are in a huge growth moment and the lowest unemployment in 50+ years but the overly inflated in employment, salary, benefits, tech sector is going to take a massive hit. Such is life.

Very interesting post. Sounds like you're in blue chip profitable tech ?

I worked in a start up in 2000 whilst still a student. That was crazy!

 

[DeathtoGnomes]

Remember dear customers - vote with your wallets

There are too many who lack self control and 'need that now' attitude, this statement would work if it actually meant something more in the short term.

My curiosity is whether or not these layoffs are people that work from home and refuse to return to the office environment.

 

[SOAREVERSOR]

Very interesting post. Sounds like you're in blue chip profitable tech ?

I worked in a start up in 2000 whilst still a student. That was crazy!

No I contract for multi billion buck consulting and legal firms. My advice was 1. since you have a glut of shit you bought stop buying it, 2. hire cheaper staff there is no reason to pay for US or EU services when I can save you billions by going to Vietnam or the Philipines. 3. you don't need all that remote shit now, and if you are going to use it, go back to 2 and get the fuck out of expensive labor, but if you want to use US labor kill your IT contract services now and get rid of it you don't need it.

So... it's gone.

 

[mrnagant]

Their FY21, 22 and 23 reports are all record reveneue, record revenue, income up, income up, earnings up, earnings up. Q3 FY23 has operating income record, non-gaap operating income record, bragging about how well they are handling this "downturn" and still have record FY23 revenue by 9%.

The only negative on the report is that revenue is down 6% for Q3. "Oh, btw all our numbers are great, we are doing great, we still have record numbers in all the stuff, we are the best. Just this one little metric, revenue is down 6% in Q3 so we are going to *cough* fire 5% our workforce *cough*."

I wonder what kind of employment growth Dell saw over covid, if any.

 

[SOAREVERSOR]

Their FY21, 22 and 23 reports are all record reveneue, record revenue, income up, income up, earnings up, earnings up. Q3 FY23 has operating income record, non-gaap operating income record, bragging about how well they are handling this "downturn" and still have record FY23 revenue by 9%.

The only negative on the report is that revenue is down 6% for Q3. "Oh, btw all our numbers are great, we are doing great, we still have record numbers in all the stuff, we are the best. Just this one little metric, revenue is down 6% in Q3 so we are going to *cough* fire 5% our workforce *cough*."

I wonder what kind of employment growth Dell saw over covid, if any.

https://www.dell.com/en-us/dt/services/index.htm a lot. Hardware is for suckers and gamers do not count and will never count.

 

[mrnagant]

https://www.dell.com/en-us/dt/services/index.htm a lot. Hardware is for suckers and gamers do not count and will never count.

~75% of Dells revenue is from products. 25% is from services. Last 9 months, $77B in revenue, $60B of that is hardware, $17B services. Dell is seeing gains in services, but still larger gains in hardware.

 

[ThrashZone]

When it's worded like this it makes it sound like the company is looking to be in the red and they're panicking to make sure they avoid that so they're dumping staff.

Hi,
Maybe the ceo/... will take a pay cut and refuse bonuses like Intel says it's going to do, I won't hold my breath waiting

 

[Jism]

Even tho the 30% loss in revenue compared over previous period, they still make into the millions of not billion of profit. And just because of that 6500+ employees are fired. Because the profits is'nt enough.

Id like to see a company that makes a simple forecast with Hey guys we're not having such a great profit and we take granted our millions / billions we still make on avg.

 

[[XC] Oj101]

Even tho the 30% loss in revenue compared over previous period, they still make into the millions of not billion of profit. And just because of that 6500+ employees are fired. Because the profits is'nt enough.

Id like to see a company that makes a simple forecast with Hey guys we're not having such a great profit and we take granted our millions / billions we still make on avg.

It's probably pressure from shareholders. They want to see growth, the same amount of profit quarter-on-quarter isn't enough even if it is astronomical.