Flagging personal computer sales over the past couple of years finally pushed PC giant Dell to lay off several thousand employees if it is to remain operational.

Dell will let go of 6,650 employees – around 5% of the company’s total global workforce – according to a regulatory filing made on Monday, February 6th. At present, the company is being buffeted by economic conditions that leave it in limbo as to its future.

As of 1 pm EST on Monday, February 6th, company shares fell by around 3.3%  compared to a 0.7% drop in the tech-centric Nasdaq 100.

In a memo sent by Dell’s co-chief operating officer Jeff Clarke to employees, he said that the company’s previous cost-management measures are no longer enough to ensure its operability. These include its current hiring freeze as well as its temporary halt on corporate travel. But with PC sales flagging throughout the world, these have failed to keep Dell within a safe zone.

Bottoming Demand

While PC sales surged between 2020 and 2021, essentially the height of the shift to remote working, Dell and its peers in the industry now see a significant drop in demand. 

For the period that ended on October 28, 2022, Dell reported a 6% decline in sales and presented a revenue forecast that eventually fell short as the year drew to a close. This occurred at a time when most would-be customers reduced their purchases in terms of information technology and consumer electronics.

Industry watchers noted that shipments of personal computers plunged in Q4-2022, with Dell being the biggest loser as its sales plummeted by 37% compared to where it was at the same time in 2021. This is a dire sign for a company that gets 55% of its total revenue from selling PCs.

The Latest to Fall

Dell is just the latest tech titan to lay off employees. Over the past several months, a number of companies in the sector have reduced their workforces in the interest of staying operational in light of the ongoing economic crisis. Dell’s biggest competitor HP Inc. announced that it was set to lay off as many as 6,000 of its people in November of last year. 

Neither IBM nor Cisco have been spared by the crisis, as both companies announced that they would each remove 4,000 workers.

In total, the number of employees laid off from the tech sector last year hit around 97,171 – an increase of 649% from figures reported in 2021.