Faced with falling revenue, HP announced it plans to lay off 4000 to 6000 employees by the end of fiscal 2025, reducing its global workforce of 51 by approximately 000%.
The news comes as economic turmoil pushes other big tech companies to announce layoffs.
News of HP's job cuts broke when the company released its fourth-quarter 2022 financial results on Tuesday, in which revenue declined 11,2% year-over-year to $14.800 billion. The company's personal, business and consumer systems segments fell 13%, 25% and 6%, respectively. Laptop and desktop units also saw declines, with units down 21% overall.
The job cuts are part of HP's so-called "Future Ready" strategy, announced alongside its quarterly results. In a conference call with analysts after the earnings release, HP Chairman and CEO Enrique Lores said the strategy will enable the company to better serve its customers and drive "long-term value creation by reducing our costs and reinvesting in key growth initiatives to position our business for the future,” according to a Seeking Alpha transcript.
Lores added that the cost measures outlined in 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 it has described as "short-term market headwinds." term" and mitigate HP's problems. core weakness. markets.
In a statement, HP said: “As part of the steps we are taking, we will reduce the size of our workforce by 4000 to 6000 people over the next three years. These are the most difficult decisions we have to make, because they have an impact on the colleagues who are close to our hearts. We are committed to treating people with care and respect, including financial support and professional services to help them find their next opportunity.
Helwett-Packard spun off the PC and printer business from its enterprise business in 2015. Hewlett-Packard Enterprise, also known as HPE, includes enterprise hardware, software and services businesses, and will publish its results next week. HP Inc., the PC and printer company, is generally known simply as HP.
Drop in PC sales
Earlier this year, IDC reported that PC shipments in the third quarter were down 15% year-over-year. Commenting on the October news, Jitesh Ubrani, research manager for consumer and mobility device trackers at IDC, said: "During the height of the pandemic, many consumers, schools and businesses were looking for new PCs and this increase was met. to a large degree.
Record levels of inflation, coupled with a cost-of-living crisis, have also led consumers to cut spending on luxury items such as laptops and desktop computers.
Dell Technologies has also seen its PC sales decline in the past 12 months. Although the company's total revenue for the third quarter fell just 6% according to its third-quarter earnings report released Tuesday, its consumer revenue fell 29% on weak underlying PC demand and slowing needs. infrastructure.
Dell, however, having acquired storage company EMC, also sells enterprise technology, which has helped offset declines in the PC market. Its infrastructure group, which includes storage, networking and cloud technology, posted record third-quarter revenue of $9600 billion, up 12% from a year earlier.
Unlike other tech companies that are laying off workers to control operating costs, Dell has not announced that it will cut jobs due to financial results. However, speaking to analysts after the earnings release, Dell CFO Tom Sweet said that from a spending perspective, Dell had "limited hiring and implemented other costs."
However, the layoffs and hiring slowdowns announced by major providers are not necessarily cause for despair for technology professionals. More than 100.000 jobs for experienced IT professionals remain unfilled in the United States, according to IT employment consultancy Janco Associates.
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