In the face of declining revenue, HP has announced that it expects to cut 4,000 to 6,000 jobs by the end of fiscal 2025, reducing its 51,000-strong global workforce by about 12%.
The news comes as other major tech companies announce layoffs amid economic turmoil.
News of the HP job cuts was revealed on Tuesday as the company posted its fourth-quarter 2022 financial results, which showed a year-over-year revenue decline of 11.2% to $14.8 billion. The company’s personal systems, consumer and commercial divisions fell 13%, 25% and 6%, respectively. Notebook and desktop units also declined, with units down 21% overall.
The job cuts are part of HP’s so-called “future-ready” strategy, which was announced in conjunction with its quarterly results. In a conference call with analysts after posting the results, HP President and CEO Enrique Llores said the strategy will enable the company to better serve its customers and “by reducing our costs and reinvesting in key growth initiatives to position our business,” according to a transcript from Seeking Alpha. Creating Long-Term Value”.
Laures added that the cost actions planned for the Future Ready plan will generate at least $1.4 billion in savings by the end of fiscal 2025, allowing the company to navigate what he described as “near-term market headwinds” and reduce softness in HP’s core. the market
In a statement, HP said: “As part of the actions we are taking, we will reduce the size of our workforce by 4,000-6,000 people over the next three years. These are our most difficult decisions, because they affect colleagues we care about deeply. We are committed to treating people with care and respect – including financial and career services support to help them find their next opportunity.”
Hewlett-Packard spun off its PC and printer business from its enterprise business in 2015. Hewlett-Packard Enterprises, also known as HPE, consists of enterprise hardware, software and services businesses and will report results next week. HP Inc., PC and printer company, commonly known as HP.
PC sales are down
Earlier this year, IDC reported that third-quarter PC sales fell 15% year over year. Commenting on the news back in October, Jitesh Ubrani, research manager for mobility and consumer device trackers at IDC, said: “During the peak of the pandemic, many consumers, schools and businesses wanted new PCs and that wave was largely met.”
Record levels of inflation and the cost of living crisis have led consumers to cut back on their spending on luxury items like laptops and PCs.
Dell Technologies has also seen its PC sales decline over the past 12 months. Although the company’s total revenue fell just 6% for the third quarter, its consumer revenue fell 29% due to softer underlying PC demand and slower infrastructure requirements, according to a third-quarter earnings report posted on Tuesday.
Dell, however, also sells enterprise technology by acquiring storage company EMC, which has helped offset the decline in the PC market. Its infrastructure group, which includes storage, networking and cloud technologies, posted revenue of $9.6 billion in the third quarter, up 12% year over year.
Unlike other tech companies that have laid off workers to reign in operating costs, Dell has not said it will cut jobs as a result of financial results. However, speaking to analysts after the results were posted, Dell’s CFO, Tom Sweet, said that, from a cost perspective, Dell had “put in place controlled hiring and other cost control measures.”
The layoffs and hiring slowdown announced by major vendors, however, are not a cause for concern for tech professionals. According to IT employment consultancy Zanco Associates, more than 100,000 jobs remain unfilled for experienced IT professionals in the United States.
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