HP laying off 4,000-6,000 employees globally over the next three years

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  • HP’s cost-cutting gesture comes three years after it reduced headcount to 9,000.
  • The company reported weakness in commercial and consumer PC sales during the quarter ended October 31.
  • HP also issued lighter earnings guidance for the new 2023 fiscal year.

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computer maker HP Inc. said on Tuesday that it plans to cut 4,000 to 6,000 employees over the next three years. Shares rose 1% in extended trading following the announcement.

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HP is the latest technology company to announce its intention to mitigate the given economic challenges. Facebook parent Meta, Microsoft and Salesforce are among those that have made similar changes. HP, for its part, is responding to declining computer sales. Firstly the Covid pandemic created a PC buying frenzy as people rushed to work and play from their homes. But the sensational increase did not happen.

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one in Statement, HP said its “future ready transformation plan” should result in annual gross run rate savings of $1.4 billion or more over the next three years, including restructuring costs of approximately $1 billion. Of that $1 billion, $600 million will come in the fiscal year 2023, which ends on October 31, 2023. The remaining amount will be split equally between the 2024 and 2025 fiscal years, HP said.

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As of October 2021, HP will have approximately 51,000 employees. In 2019, HP announced that it would lay off 7,000 to 9,000 employees.

HP said revenue in its fiscal fourth quarter, which ended Oct. 31, declined 0.8% year over year to $14.80 billion. Revenue in the Personal Systems segment, which includes PCs, fell 13% to $10.3 billion as units fell 21%. Consumer revenue in the segment slipped 25%. Printing revenue was $4.5 billion, down 7%, as units fell 3%.

In quarter pastPersonal Systems revenue declined 3%, and Printing revenue declined 6%.

From a profitability perspective, HP reported that operating margin for the Personal Systems segment narrowed to 4.5% from 6.9% in the previous quarter.

Also on Tuesday, HP announced downbeat earnings guidance.

The company provided a range of adjusted fiscal first-quarter earnings of 70 cents to 80 cents per share, below the consensus of 86 cents among analysts polled by Refinitiv.

For fiscal 2023, HP calls for adjusted earnings per share of $3.20 to $3.60, below Refinitiv’s consensus of $3.62 per share.

watch: HP Inc. CEO on company’s planned layoffs and ‘future ready transformation plan’

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