Daily Management Review

HP To Reduce Its Global Workforce By 4,000-6,000 In Next Three Years


HP To Reduce Its Global Workforce By 4,000-6,000 In Next Three Years
Top computer manufacturer HP Inc. has announced its plans of laying off 4,000 to 6,000 workers within the next three years. Following the announcement, stocks of the company hiked by as much as 1% in extended trading.
Considering the economic challenges being faced by the tehc industry currently, HP is the latest technology company to announce its intention to rduce its work forcee. 
The top companies that have already announced or implemented similar changes include names like Facebook parent Meta, Microsoft, and Salesforce. 
HP, for its part, is reacting to a drop in computer sales. The Covid pandemic initially caused a PC buying frenzy as people rushed to work and play from their homes. However, the spectacular growth did not last.
HP said in a statement that its "Future Ready Transformation plan" should result in annualized gross run rate savings of $1.4 billion or more over the next three years, with costs including restructuring of around $1 billion. Of that $1 billion, $600 million will be spent in the fiscal 2023 fiscal year, which runs from October 1 to October 31, 2023. The remainder will be distributed evenly between the fiscal years 2024 and 2025, according to HP.
HP had approximately 51,000 employees as of October 2021. HP announced in 2019 that it would lay off between 7,000 and 9,000 employees.
HP reported that revenue in the fiscal fourth quarter, which ended on October 31, fell 0.8% year on year to $14.80 billion.
Personal Systems revenue, which includes PCs, fell 13% to $10.3 billion, while unit sales fell 21%. The segment's consumer revenue fell by 25%. Printing revenue fell 7% to $4.5 billion, while units fell 3%.
Personal Systems revenue fell 3% in the previous quarter, while Printing revenue fell 6%.
In terms of profitability, HP reported that the operating margin for the Personal Systems segment fell to 4.5% from 6.9% in the previous quarter.
HP also issued disappointing earnings guidance on Tuesday.
The company forecast adjusted fiscal first-quarter earnings of 70 cents to 80 cents per share, which fell short of the Refinitiv consensus of 86 cents.
HP forecasted adjusted earnings per share of $3.20 to $3.60 for the fiscal year 2023, which fell short of the Refinitiv consensus of $3.62 per share.