Dell Technologies has announced significant workforce reductions as part of a comprehensive cost-cutting strategy, amid an economic landscape marked by declining PC demand. The company’s recent move to streamline operations includes not only staff cuts but also measures to curb external hiring and a broad restructuring of its existing workforce. These actions come in response to a protracted downturn in the PC market, which has seen Dell’s revenue fall by 11% in the last quarter. Despite these challenges, Dell remains optimistic about the future growth of its Client Solutions Group (CSG), which focuses on PCs, even after experiencing a 12% drop in revenue in the same period.
Dell‘s workforce had already diminished to nearly 120,000 employees before this latest round of layoffs, down from over 126,000 a year ago. This includes the elimination of 6,650 jobs in 2023, a decision influenced by the broader industry trend of declining PC demand, potential recession concerns, and the aftermath of Broadcom’s $69 billion acquisition of VMware—a company with which Dell had a significant commercial relationship.
Moreover, Dell is adjusting its workplace policies as well. The company, which had previously embraced a flexible hybrid work culture, is now implementing a stricter return-to-office (RTO) policy. This pivot marks a departure from its earlier stance that allowed remote workers the flexibility to work from home without impacting their promotional prospects. The new policy categorizes employees as either “hybrid” or “remote” workers and mandates a more structured return to office work.
While Dell faces immediate challenges, including a cautious outlook on short-term market conditions and an anticipation of rising input costs, the company claims that it is positioning itself for recovery. With an eye towards FY 2025, Dell anticipates a rebound in demand and a more competitive pricing environment, alongside efforts to navigate the ongoing decrease in net revenue for other business segments, particularly in light of its evolving relationship with VMware.
