Dell joins the streak of layoffs in the US and cuts 5% of its employees

The company Dell Technologies Inc has communicated this Monday to the financial regulator that it has seen the need to cut 5% of its global workforce, some 6,600 employees. “The company continues to take prudent steps in light of the difficult environment of the global economy,” says the corporate message sent to the Securities and Exchange Commission. In this way, the company joins several corporations that have reduced their workforce in recent months, a phenomenon that has been especially present in large technology companies due to the drop in demand for computers, which fell 21% in the last quarter. .

Jeff Clarke, Dell’s vice president, explained this morning by email to workers that the measure came because the cuts that have been implemented in previous quarters have not been sufficient. “We know that market conditions continue to erode with the future uncertain… Additional decisions must be made to prepare for the road ahead,” Clarke said. “We have navigated economic difficulties before and have come out of them stronger,” he added.

Dell, founded 38 years ago, has some 133,000 employees, according to the most recent figure published by the company, for 2022. A third of them work in the United States. Now, the company will merge some areas into a single work team. These changes primarily affect the global sales, service, and engineering divisions that sell and service server infrastructure and other storage products.

A few months ago, the company had tried to reduce costs by limiting the trips of its employees and reducing dependence on external services, which began to be done in what is known as in-house, locally. Even before Monday’s announcement, the size of the squad has been shrinking over the years. At the beginning of 2020, the company had 165,000 workers. Some 30,000 were part of VMware, a software company specializing in cloud services, and of which Dell controlled 81% of the titles.

During the pandemic, Dell announced that it was preparing to spin off VMware, where it had a valued stake of $52 billion. This operation, said the company’s executives, would allow it to penetrate new markets and expand its presence in others where it already had a presence. The benefits obtained from the sale were also going to be used to pay off a debt that it has carried since a 2016 merger and that amounted to some 33.4 billion dollars.

The company founded by Michael Dell in 1984 joins with this cut to other large technology companies such as Microsoft, Alphabet, Meta and Amazon that have announced cuts in personnel and costs after evaporating 77,000 million profits. Only Apple has so far avoided massive layoffs of its employees, although the company led by Tim Cook reported last week that it closed 2022 with a 5% drop in its quarterly revenue. Other large corporations such as 3M and Fedex have also opted to reduce their workforces in the face of a scenario marked by inflationary pressures and rising interest rates.

Companies are holding back on investment, rationalizing office space, canceling unprofitable projects and taking other measures. Meta Platforms was the first of the five to announce massive layoffs (11,000 employees, 13% of the total). Alphabet, the owner of Google, has announced 12,000 layoffs this year, the equivalent of 6% of its total workers. Amazon, for its part, has reduced its workforce significantly last year, beyond the 18,000 layoffs announced. Microsoft has reported the cut of some 10,000 jobs, around 5% of the workforce.

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