Dell is streamlining its workforce with a staggering 6,000 employee layoff, joining the growing list of tech giants shedding weight in 2024. This move comes amidst concerns over a potential recession and a slumping PC market.
The layoffs follow a rough patch for Dell. The company’s bread and butter – personal computers – have seen sluggish demand for nearly two years, contributing to an 11% revenue decline in Q4 2023. Despite Dell’s optimistic forecast for PC sales growth in FY 2025, rising input costs and a “continued reduction” in revenue from other business units (likely due to the VMware spin-off) paint a concerning picture.
Dell’s recent shift towards a stricter hybrid work model has also ruffled employee feathers. Previously known for its flexible work culture, the company now requires remote workers to spend at least three days in the office for promotion consideration. This policy clashes with industry trends – a Bloomberg study revealed that companies offering remote work flexibility saw significantly higher revenue growth than those with stricter office mandates.
Dell isn’t the only one feeling the squeeze. The tech sector is experiencing a wave of downsizing, with Google shedding 1,000 employees this year (on top of 12,000 in 2023), Microsoft cutting 1,900 in 2024, and SAP trimming its workforce by 8,000. With Dell’s layoffs, the tech industry has seen over 50,000 employees let go so far in 2024.
While Dell remains hopeful for a PC market rebound and future growth, the company’s cost-cutting measures and employee discontent raise questions about its long-term strategy. Only time will tell if Dell can navigate these headwinds and emerge stronger.
