HP has announced plans to lay off 4,000 to 6,000 employees over the next three years, making it the latest tech company to announce job cuts or hiring freezes, following Meta, Microsoft, and Salesforce.
The layoffs are said to represent nearly 10 per cent of the company’s current workforce and are part of a larger cost-cutting strategy that coincides with declining sales and a deteriorating economy.
In a statement, HP said its “Future Ready Transformation plan” should result in annualized gross run rate savings of $1.4 billion or more in the next three years, with around $1 billion in costs including restructuring. Of that $1 billion, $600 million will come in the fiscal 2023 fiscal year, which ends Oct. 31, 2023. The rest will be split evenly between the 2024 and 2025 fiscal years, HP said.
The company added that fourth-quarter revenue was down 11.2 per cent year-on-year to $14.8 billion, and fourth-quarter sales in HP Inc.’s computer division were down 13 per cent year-on-year to $10.3 billion, owing largely to a 25 per cent drop in consumer revenue.
The layoffs, combined with a reduction in the company’s real estate footprint, are expected to save $1.4 billion in annualized spending by the end of the fiscal year in 2025. The restructuring is expected to cost around $1 billion.
HP’s latest layoffs come more than three years after 7,000 to 9,000 employees were laid off in 2019.
The sources for this piece include an article in CNBC.