Dell Technologies disclosed a reduction in its workforce as part of a comprehensive cost-cutting initiative, which involved measures such as restricting external hiring and reorganizing employees in a filing released on Monday.
As of February 2, 2024, the company’s workforce stood at nearly 120,000 employees, down from approximately 126,000 the previous year.
The decision to downsize comes in the wake of subdued demand for its personal computers over the past couple of years, a factor contributing to an 11% decline in fourth-quarter revenue, as reported last month. Dell expressed optimism regarding the growth of net revenue in its client solutions group (CSG), the division encompassing PCs, for the entirety of the year. However, this segment experienced a 12% revenue decline in the fourth quarter.
While acknowledging immediate challenges, Dell anticipates an improvement in demand and a more competitive pricing environment in fiscal year 2025. Nonetheless, the company foresees an increase in input costs and anticipates a “continued reduction of our other businesses’ net revenue” due to alterations in its commercial relationship with VMware.
Dell had repurchased shares linked to its stake in VMware, facilitating its return to the market in 2018. Last year, chipmaker Broadcom completed its acquisition of VMware for $69 billion. In response to the potential impact of an economic downturn and dwindling demand for personal computers, Dell had previously slashed 6,650 jobs.
