Dell announced a workforce reduction, as well as limited hiring and reorganization as part of a comprehensive cost optimization program. These measures were a response to falling demand for personal computers (PCs) and an 11% decline in company revenue in the fourth quarter of the last fiscal year.
As of February 2, 2024, Dell had approximately 120,000 employees, a decrease of 6,650 compared to the prior year. Such a sharp reduction in staff was one of the company's responses to an almost 2-year decline in demand for PCs, which had a significant impact on its financial results and caused dissatisfaction among shareholders.
In an official statement published on Monday, Dell provided revenue forecasts for its Client Solutions Group (CSG), which is responsible for the PC business. The company expects revenue from this segment to show growth throughout the current fiscal year, despite a decline recorded in the fourth quarter of the previous year.
Dell analysts point to impending improvements in demand conditions and competitive pricing during fiscal 2025, which should help restore the company's position in the PC market. However, Dell predicts rising component costs. Moreover, the company forecasts a decline in net revenue for a number of business areas, which is directly related to changes in its commercial relationship with VMware.
An important stage in the history of this relationship was Dell's return to the market in 2018 after repurchasing shares associated with its stake in VMware. This move provided the company with a strategic advantage. However, Broadcom's subsequent $69 billion acquisition of VMware last year had a significant impact on Dell's financial strategy.
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