HP plans to cut 4,000 to 6,000 employees over next three years

November 23, 2022  15:24

HP Inc. plans to cut 4,000 to 6,000 jobs over the next three years. Interestingly, the company's share price rose about 1 percent after the announcement.

In the midst of the coronavirus epidemic, people began to actively buy computers and laptops, but now the demand for these devices has declined, and this could not but affect the activity of their manufacturers.

Problems in HP

According to Gartner, the global personal computer market is down 19.5 percent in the third quarter of 2021 compared to the same period in 2022. This is the largest decline in a decade.

In addition, HP was hit hardest this year, the company sold 5 million fewer computers than it did last year. In 2022, revenue fell 11% year over year to $14.8 billion and 8% sequentially in the fourth quarter of its fiscal year. In the personal systems segment, revenue was down 13% to $10.3 billion and shipments by volume were down 21%.

Shipments in the notebook segment fell 26% and the desktop PC segment fell 3%. The drop in revenues in the consumer sector reached 25%, and in the commercial sector, 6%. Sales of printing devices brought the company 7% less money than a year ago, only $4.5 billion, while the quantitative equivalent of shipments decreased by 3%.

HP Inc. management expects personal computer sales to decline 10% in the current fiscal year.

Layoffs in HP

Now the company, which cut 9,000 jobs three years ago, plans to cut staff even more. It’s true that the restructuring will require a $1 billion outlay, but company executives expect it will reduce annual expenses by $1.4 billion in the future.

According to CNBC, the restructuring plan calls for spending $600 million in the current fiscal year, which began Oct. 31 and will end the same day in 2023, with the remaining $400 million to be split evenly between 2024 and 2025.

In 2021 HP Inc. had 51,000 employees as of October, and the workforce reached 61,000 this October. The company plans to cut up to 40 percent of its planned 6,000 employees in 2023, with the rest cut to follow in 2024 and 2025.

In addition to cutting costs, the company plans to save on rented real estate and look for new ways to sell its products to increase revenues.

Layoffs in other companies

HP Inc. is far from the only company that is cutting staff.

Meta Platforms CEO Mark Zuckerberg plans to lay off 11,000 people, or about 13% of the company's staff. This is the largest reduction in the corporation's history. Meta also has a lot of problems today, although the reasons are different from those faced by HP.

Amazon is also planning the largest layoffs in the company's history. About 10,000 employees will be laid off, which is about 3 percent of the company's full-time employees and less than 1 percent of its global workforce.

And nearly two-thirds of Twitter's employees have been laid off. Elon Musk laid off half of his employees shortly after he became CEO. Later, he fired at least a dozen engineers who openly criticized him in tweets or on the internal messenger Slack. Many of the company's employees began voluntarily quitting their jobs when they read Musk's ultimatum, in which he suggested working "long hours and high intensity" or quitting.

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