BackHP to lay off 10% of global workforce, cut 6,000 jobs to counter ‘challenging market environment’
HP Inc. will eliminate as many as 6,000 jobs amid declining demand for personal computers that has cut into profits.
PremiumIn response to dwindling personal computer demand that has reduced revenues, The Hewlett-Packard Company (HP) will axe up to 6,000 jobs over the next three years. HP has been coping with a persistent decline in the market for personal computers, which accounts for the majority of its revenue. As businesses cut down on employee numbers and cut back on technology spending, it started with lower-end consumer goods and has since spread.
HP will reduce its real estate footprint and slash up to 10% of its 61,000 global employees over the next three years to control costs, according to CEO Enrique Lores. Restructuring costs for the company are expected to total $1 billion, with roughly 60% of those costs falling in the newly started fiscal year 2023. According to HP's statement, the plan should save as much as $1.4 billion annually by the end of the fiscal year 2025.
Also Read: Google joins layoff trend in 2022, to let go 10,000 ‘low performing’ employees
Analysts, according to information gathered by Bloomberg, expected $3.61 per share on average. The amount of free cash flow will be roughly $3.25 billion, which is less than anticipated. In the fiscal year ending in October 2023, earnings will range from $3.20 to $3.60 per share, excluding certain factors, HP said in a statement.
While the company expects a “challenging market environment", as per Lores, a 10% decrease in computer sales during the fiscal year is predicted.
The third quarter saw a decline in global PC shipments of almost 20%, which is the largest decrease since Gartner Inc. began tracking the data in the middle of the 1990s. Dell Technologies Inc., which generates 55% of its revenue from selling PCs, presented a lacklustre forecast for the current quarter on November 21 and indicated that some customers had delayed purchases for the foreseeable future.
Also Read: Mass layoffs: People are using LinkedIn to look for immediate jobs
In recent weeks, a number of IT businesses have revealed intentions to reduce their workforces. Meta Platforms Inc. and Amazon.com Inc. started laying off about 10,000 workers, and Twitter Inc. eliminated more than half of its 7,500-person workforce. While Cisco Systems Inc. last week unveiled a plan to reduce an unspecified number of jobs and close offices, hard drive manufacturer Seagate Technology Holdings Plc. announced it would eliminate about 3,000 jobs.
(With inputs from Bloomberg)
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
