Dwindling PC Sales Prompt Dell To Shed 30%

by CXOtoday News Desk    Jan 13, 2014

layoff

Dell seems to be feeling the blow of the dwindling PC market. A report by The Register cites sources at Dell said that the company will let go of 30% of its sales and marketing executives in Europe, the Middle East and Africa (EMEA) region. The report also states that 20% of the sales staff in the US may also face the axe. The sources do not have information on job cut plans of the company in Asia Pacific region.

Dell currently employs 1,11,300 people worldwide. The Register estimated that roughly 9,000 employees could be let go worldwide.

Some believe that apart from shrinking PC market that has affected the company’s growth, Dell’s move from public to private company last year would inevitably lead to some cuts – especially in low-profit areas like PCs. However, the cuts according to the report will take place across the board. This would mean, along with laying off employees that work in the PC department, Dell is also cutting staff from other departments like enterprise software and storage.

According to a recent report by analyst firms IDC and Gartner, global PC shipments, including desktops and laptops, suffered its worst ever decline in 2013. What contributed to the decline for the last two years was the rapid adoption of tablets and smartphones. Global PC shipments for 2013 totaled 315.9 million units, declining 10 percent from 2012. Apart from Lenovo no other vendor witnessed positive growth in this segment.

In the past few years, Dell too  has been working hard to change its image from a hardware manufacturer to a software and services company, more precisely to an end-to-end solutions player for clients. Murli Mohan, General Manager, Dell Software, India, told CXO Today, after integrating the various product lines it sourced through different acquisitions in the past 2-3 years, things are finally looking up for the Dell Software division and it is set to position itself as an important player in the software market.

Mohan also informed with its suite of software products, Dell is clearly targeting four critical markets: data center and cloud management, enterprise mobility, information management and security that are of primary importance to the enterprise in recent times and will be the trends in the future.

However, as far as its layoffs are concerned, a Dell statement said: “We continuously evaluates and implements opportunities to improve our operational effectiveness and allocate our resources. When necessary, we’ll continue to make tough decisions to help ensure our long-term success — some of these decisions may affect our workforce. We are committed to building upon our multichannel approach to serving customers — channel, online, and direct — and are investing in sales coverage and training.”

In December 2013, the company had asked employees across the world to join a ‘voluntary separation programme’, wherein ‘eligible’ members of the workforce were given the option to quit in exchange of a severance package, which was as good as a layoff. Another report by CNet states that the company will release the names of employees accepted under this programme sometime this week.