Dell announces layoffs after revenue drops due to fall in demand for PCs

Dell announces layoffs after revenue decreases due to fall in PC demand

American technology company Dell announced yesterday (25 March) that it will be laying off workers due to a fall in revenue.

Source: CNBC

The company had about 120,000 employees as of Feb 2024, compared to 126,000 in 2023.

The layoffs came after an 11% drop in Q4 2023 revenue due to lower demand for personal computers, reported Reuters.

Trimmed workforce to reduce costs

Dell attributed customers’ reduced spending on IT products to the uncertain macroeconomic environment.

This, in turn, impacted the net revenue performance of Dell’s Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG).

The company shared that over Fiscal 2024, the team has taken steps to reduce costs.

These measures include reducing external hiring, restructuring employees, as well as “other actions to align [its] investments with [its] announced strategic and customer priorities.”

Predicts demand to improve in 2025

However, Dell anticipates the demand to pick up in Fiscal 2025, enabling the company to increase its net revenue for the full fiscal year.

In particular, it predicts that ISG net revenue will increase due to higher demand for these offerings:

• Artificial Intelligence (AI)-optimised servers
• Traditional servers
• Storage offerings

Among these, customers showed a higher demand for AI-optimised solutions during Fiscal 2024 as more organisations sought to incorporate AI into their operations.

The company also anticipates its CSG net revenue to grow for the entire fiscal year of 2025.

This is partly attributed to the PC refresh cycle that’s set to take place “in the latter part” of the fiscal year.

According to the company, refresh cycles help prolong the PC’s lifespan while also enabling users to obtain newer and faster devices.

The Economic Times reported that Dell laid off 5% of its workforce in 2023, which amounted to 6,500 employees.

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