PC giant Hewlett-Packard will cut up to 6,000 jobs over the next three years as falling demand for personal computers eats into company profits.
Hewlett-Packard
The majority of HP’s company, which derives most of its revenue from computer sales, has been dealing with a continuing slump in demand for personal computers. HP CEO Enrique Lores said the market downturn started with low-end consumer products but has spread as companies cut jobs and limited investment in technology. Leading research firm Gartner reported that worldwide PC shipments fell nearly 20 percent in the third quarter, the biggest drop since the company began tracking the data in the mid-1990s.
To manage costs, HP will lay off up to 10 percent of its 61,000 employees worldwide over the next three years and reduce its presence in real estate markets, Lores said. HP’s move will incur an estimated $1 billion in restructuring costs, about 60 percent of which will occur in fiscal 2023, which begins this month. The plan will save $1.4 billion annually by the end of fiscal 2025, HP said in a statement.
HP said in a statement Tuesday that the company’s earnings per share, excluding certain items, will be between $3.20 and $3.60 for the fiscal year ending October 2023, below analysts average estimate of $3.61 per share, and that free cash flow of about $3.25 billion is also lower than expected. In an interview, Lores said the forecast assumes a 10 percent decline in computer sales for the fiscal year. “We expect the market environment to be challenging,” he said. He said.
