HP will lay off up to 6,000 people over the next three years…
HP has joined the workforce reduction procession of tech companies following Amazon, Meta, and Microsoft.
HP announced in a statement on the 23rd that it plans to reduce 4,000 to 6,000 employees over the next three years. Demand for computers soared due to the spread of telecommuting and remote classes during the pandemic, but computer sales worldwide declined after the pandemic ended. It is a concrete move to overcome this.
Shares rose more than 2% in after-hours trading after HP announced the restructuring plan.
HP came up with a restructuring plan called ‘Future Innovation Plan’. It could save about $1 billion over the next three years, including annual restructuring, the company said. It explained that $600 million of that $1 billion will be reflected in fiscal 2023 (October 31st, settlement date).
As of October 2021, HP has about 51,000 employees. HP has previously announced that it will lay off 7,000 to 9,000 employees in 2019.
HP said sales in the fourth quarter (August to October) fell 0.8 percent year-on-year to $14.8 billion. Sales in the personal system sector, including PCs, fell 13% to $10.3 billion during the same period. In terms of the number of sales, it decreased by 21%. Profitability also deteriorated. The operating profit ratio of the personal system sector fell to 4.5 percent from 6.9 percent in the previous quarter.
Sales in the consumer sector are down 25 per cent. Sales in the printing sector fell 7 percent to $4.5 billion. In the previous third quarter, sales in the personal system sector fell 3%, and the printing sector fell 6%. The decline was larger than in the third quarter.
HP lowered its net profit outlook to reflect this trend. The company’s first-quarter adjusted earnings per share (November to January) are 70 to 80 cents. The figure is below the Wall Street analysts’ average of 86 cents.