It may be a new month, but the news hasn’t gotten any better when it comes to the tech sector. Since the end of 2022, nearly all major players in the tech industry have announced job cuts in order to reduce costs amid a feared economic slowdown and following what is now widely regarded as an over-hiring spree during the early pandemic years.
Today, PC juggernaut Dell Technologies joins the ranks of companies that have laid off a combined hundred of thousands of workers in the tech sector as of late. As reported by Bloomberg, Dell will lay off about 5% of its global workforce of 133,000. That equates to about 6,650 jobs lost and will see Dell have its lowest headcount since 2017.
In a memo, Dell co-chief operating officer Jeff Clarke said market conditions that “continue to erode with an uncertain future” necessitated the job cuts. While personal computer sales soared in 2020 as lockdowns commenced and employees were forced to work from home, PC shipments took a nosedive throughout 2022 as workers returned to the office and consumers cut back on spending.
With layoffs totaling roughly 5% of its workforce, Dell’s cuts align with many of its tech industry counterparts in terms of size. While some companies have laid off many more than 6,600 workers, a majority of tech industry layoffs hover around 6% of a company’s total workforce.
A likely reason for this, James Surowiecki wrote for Fast Company last week, is that tech CEOs pay attention to what each other are doing. “The boom in 6% layoffs, then, is something like a fad—the product of what Stanford professor Jeffrey Pfeffer has called ‘social contagion,’” Surowiecki wrote. “Just as people everywhere decided a decade ago that planking in weird places was a worthwhile thing to do, tech companies have decided in the past few months that about 6% of their employees are surplus to requirements.”
Roughly one-third of Dell’s global workforce are U.S.-based employees. It is unknown if the layoffs will be spread evenly across the globe. As of the time of this writing, DELL stock is mostly flat in pre-market trading at $42.20 per share.
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