HP is planning to cut 4,000- 6,000 jobs by the end of the fiscal year 2025 as part of a multi-year restructuring plan, the US company said on Tuesday in its fourth quarter financial results for the fiscal year 2022. HP is one of the leading PC and printing companies with close to 50,000 employees.
HP said that it is expecting to incur close to $1 billion in labour and non-labour costs due to restructuring and other costs till 2025, out of which around $0.6 billion is expected in FY 2023. HP is planning to cut costs in FY 2023 through digital transformation and portfolio optimization.
“The new Future Ready strategy we introduced this quarter will enable us to better serve our customers and drive long-term value creation by reducing our costs and reinvesting in key growth initiatives to position our business for the future,” said Enrique Lores, President, and CEO of HP.
With the return to work and relaxation of covid restrictions, PC shipments, especially of laptops have slumped across the world, hurting the bottom line of most PC companies. To be sure, Gartner reported early this month that the global PC market saw its steepest decline in the last two decades in Q3 2022 after the shipment of desktops and laptops fell 19.5% year-on-year (YoY).
Even in growing markets such as India, PC shipments fell 11.7% year-on-year (YoY) in Q3 CY 2022, after eight consecutive quarters of growth, according to an International Data Corporation (IDC) report, published last week.
HP in its financial results for Q4 FY2022 reported a 13% YoY decline in net revenue in the personal systems business with an operating margin of 4.5%. Net revenue from the consumer segment declined by 25% while the net revenue from the commercial segment fell by 6%. Notebook units were down 26% and desktops units were down 3%.
Revenue from the printing business also declined 7%YoY with an operating margin of 19.9%.
With the announcement of job cuts, HP has joined the list of big tech companies that have announced layoffs this year due to cut costs. For instance, Facebook parent Meta is planning to cut close to 11,000 jobs. Twitter, after its takeover by Elon Musk in the last week of October, has reportedly slashed half of the company’s workforce. Amazon too has announced layoffs in the devices business and is expected to make another round of job cuts in early 2023.