HP to lay off 4,000-6,000 employees over next 3 years
It is unclear at this stage which departments will be affected by the impending job cuts
Computer maker HP announced on Tuesday that it expects to lay off 4,000 to 6,000 employees by the end of fiscal year 2025, reducing the global workforce by around 12%.
The move is part of the HP's "Future Ready Transformation" initiative for 2023, which aims to achieve substantial structural cost savings via digital transformation, portfolio optimisation, and operational efficiency.
HP currently employs around 50,000 people. It is unknown which departments will be affected by the impending layoffs.
HP disclosed the plan along with its Q4 2022 financial results, which saw revenue of $14.8 billion, a decline of 11.2% from the same period in 2021.
The Personal Systems segment's revenue decreased by 13%, to $10.3 billion, as units decreased by 21%. Consumer net revenue fell by 25% while Commercial net revenue decreased 6%. With Notebooks units down 26% and Desktops units down 3%, overall units decreased by 21%.
Printing net revenue of $4.5 billion was down 7% year-on-year (down 6% in constant currency).
HP's revenue fell by 0.8% to $63 billion for the whole year, while operating profit was $6.6 billion.
The company also projected a lower-than-anticipated first-quarter profit as it anticipates weakness in both consumer and commercial demand.
"Many of the recent challenges we have seen in FY'22 will likely continue into FY'23," stated chief financial officer Marie Myers during a post-earnings call.
President and CEO Enrique Lores said the results were "a solid end to our fiscal year despite navigating a volatile macro-environment and softening demand in the second half".
However, he pointed out that HP requires a plan to reduce structural costs significantly via digital transformation, portfolio optimisation and operational efficiency.
By the end of fiscal year 2025, Lores predicted that the cost actions of the company's "Future Ready Transformation" plan would deliver at least $1.4 billion in gross annual run rate structural savings.
"They will allow us to mitigate near-term market headwinds, mitigate softness in the core businesses; and just as importantly, to maintain investments in long-term growth."
HP anticipates that it will have to spend about $1 billion in labour and non-labour expenditures related to restructuring and other charges. Almost $600 million of this total will be incurred in fiscal year 2023, and the remaining $400 million will be split between the fiscal years that follow.
The restricting occurs at a time when most tech giants, including Amazon, Meta, and Cisco, are reducing their workforce in order to prepare for a future downturn in the economy.
Facebook parent Meta has made 11,000 people redundant this month, nearly 13% of its staff. Twitter has also reduced its workforce by almost 50%, following the sale of the company to Elon Musk.
Apple has said it would pause its recruiting process in 2023, while Google parent Alphabet has declared a hiring freeze starting in July.
Amazon last week confirmed layoffs at the firm, stating that the cuts would continue to 2023.