Dell to cut over 6,000 jobs
Yahoo Finance Live anchors discuss news that Dell will cut over 6,000 jobs amid the ongoing wave of layoffs in the tech industry.
Video transcript
[AUDIO LOGO]
- The second thing to know this morning is surrounding another set of layoffs as Dell is the latest to announce around of job cuts. The computer giant is set to terminate over 6,000 jobs. Now, we spoke with Intel CEO Pat Gelsinger last week about the landscape of the PC market. Take a listen.
PAT GELSINGER: Fundamentally, post-COVID, the PC is a more critical device. And with that, this inventory correction, you know, we're still in the, you know, 270 to 275 million unit range is our expectations for this coming year. We set a range of 270 to 295. We believe we're at the lower end. But the selling rate is dramatically below that today. And that's why I say at some point, they've just got to start replenishing to the sell-through rate.
- I'm starting to wonder here, guys, this is a big number on paper for Dell, but in the context of their broader employee base, not a lot. And given the ongoing correction in the PC market, is Dell cutting enough, just given how much inventory needs to be worked out in this space and how much their margins might be impacted?
- Well, you hear about some companies that are saying that we overhired over the course of the pandemic. Dell has been cutting staff for the past two years, roughly, here. The last time that they increased staff was between 2019 and into 2020. From 2020 into 2021, it moved lower by about 4.2%, 4 and 1/4 percent there. And then, in 2021 into 2022, you had roughly a 15% decline in their staff.
So this is almost a continuation of what we've already seen from Dell. It does show a shift in some of the consumer appetite, at least right now, and then, on the business-to-business side for Dell as well, perhaps shows some slowing down that they're seeing in those new portfolio clients that they're bringing on.
- Yeah, a couple of additional things to note-- because of that gradual whittling down in staff, after these cuts are completed, it'll be the lowest total number of employees at Dell in about 60 years.
- Wow.
- So, you know, as you say, it's not exactly the same road map we've seen from some of these other tech companies. On the PC front, IDC was out with some interesting numbers earlier in the month about what the fourth quarter looked like for the PC makers, and Dell not doing so hot here.
If you look at their declines, there was a drop of 37.2% year over year in their shipments in the fourth quarter to 10.8 million. So they are the third-largest PC shipment maker, or PC maker, in the fourth quarter, that is, in terms of the number of shipments. But a lot of these, I mean, you know, yes, they were down the most-- 37.2%-- but none of these guys did very, well with the exception of Apple, which was down only 2.1%. So you definitely do see-- you see some differentiation among these companies, but it's not huge.
- You do, and I think you're starting to see that differentiation on a cost basis. So Dell shares down about 29% the past year-- HP, Hewlett-Packard, those shares are only-- only-- down 19%. And I think that's why you're seeing Enrique Lores, [? kind of ?] early last year, laying off a large-- I believe it was over 10% of their workforce. So you think HP is a little more out in front of this PC correction or slowdown, and the market is trying to figure that out there.
