Market Overview

Dell Rumored To Lay Off Up To 9,000 Employees Worldwide

Dell Rumored To Lay Off Up To 9,000 Employees Worldwide

If you work in sales and marketing for Dell (NASDAQ: DELL) in Europe, the Middle East or Africa, look at the employee to your left and to your right.

One of you is about to be laid off. At least that’s what sources told the U.K.’s The Register.

According to the sources, Dell planned to cut 30 percent of its EMEA sales and marketing staff, along with 20 percent in the U.S. The Register had no information on the Asia Pacific or the rest of the Americas.

It was originally thought that with the move from public to private company, some cuts would occur – especially in low-profit areas like PCs. Enterprise-related areas (storage), the thinking went, would be spared.

According to The Register’s sources, the cuts would be “across the board,” something the sources said represented a “Let’s shrink everything” philosophy.

Although Dell said it doesn’t release staff numbers by business unit, making it impossible to count accurately the number of sales and marketing employees at the company, The Register estimated that roughly 9,000 employees could be let go worldwide.

Related: PC Sales Will Decline More Than 10 Percent by End of 2013

In response to requests for specifics, Dell told The Register that its percentages were “wrong” without elaborating, and then added, “Dell 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.”

The obvious driver of Dell layoff rumors were plunging PC sales. This made rumored cuts in other areas somewhat curious, if those cuts turned out to be real.

Not so with PCs which have suffered a seventh consecutive quarter of decline worldwide according to Gartner.

While it’s hardly news that tablets and smartphones have replaced PCs, especially in emerging markets, Gartner analyst Mikako Kitagawa had one snippet of good news in the sense that the downward trend was over.

Kitagawa said, "Although PC shipments continued to decline in the worldwide market in the fourth quarter, we increasingly believe markets, such as the US, have bottomed out as the adjustment to the installed base slows."

Overall, both Gartner and IDC agreed that global PC shipments for 2013 were down 10 percent from 2012. Among the top three vendors in sales, Lenovo was first, Hewlett-Packard second, and Dell third.

Prior to the latest layoff rumors, Dell last month offered buyouts to a portion of its employees under a Voluntary Separation Program (VSP). At that time employees had until Dec. 20 to agree to a buyout package, according to The Wall Street Journal.

At the time of this writing, Jim Probasco had no position in any mentioned securities.


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