HP Inc. plans to axe 4,000-6,000 jobs by the end of fiscal 2025 as the computer maker looks to cut costs by reducing its global headcount.
The layoffs, part of a wider cost-cutting plan, come as the company reported weak commercial and consumer PC sales during the fourth quarter, which ended on October 31, 2022.
HP's fourth quarter revenue fell 11.2% year-on-year to $14.8 billion. Revenue in the Personal Systems segment, which includes PCs, dropped 13% to $10.3 billion, dragged down by a 25% decline in consumer revenue. Printing revenue, at $4.5 billion, was down 7%, as units fell 3%.
The computer maker said its "Future Ready Transformation plan" will result in annualised gross run rate savings of at least $1.4 billion by the end of fiscal 2025. The company estimates that it will incur approximately $1.0 billion in labour and non-labour costs related to restructuring and other charges, with around $0.6 billion in fiscal 2023, and the rest split approximately equally between fiscal 2024 and 2025.
"We had a solid end to our fiscal year despite navigating a volatile macro-environment and softening demand in the second half," says Enrique Lores, HP president and CEO. "Looking forward, the new Future Ready strategy we introduced this quarter will enable us to better serve our customers and drive long-term value creation by reducing our costs and reinvesting in key growth initiatives to position our business for the future."
The latest job cuts come more than three years after HP laid off between 7,000 and 9,000 employees in 2019.
Amid fears of a global recession, many Big Tech companies have resorted to mass layoffs. According to the data tracked by Layoffs.fyi, a website that tracks layoffs, as many as 1,36,989 employees have been laid off this year so far, by 849 companies globally. Social media giant Meta sacked 11,000 employees, about 13% of its workforce, in one of biggest tech layoffs this year. Microblogging platform Twitter, which was recently acquired by Elon Musk, sacked 50% of its workforce. Software major Salesforce has fired around 1,000 employees due to the economic downturn.
E-commerce giant Amazon has cut 10,000 jobs or around 3% of its workforce. Amazon CEO Andy Jassy recently said the company will extend firings into the next year as it goes through its annual review process to find out ways to cut costs.
Alphabet, the parent tech behemoth Google, is reportedly planning to lay off as many as 10,000 employees or 6% of its workforce based on their annual performance.
In October, software major Microsoft fired 1,000 employees, or 1% of its workforce, in the third round of downsizing. Snap, the parent company of the social media platform Snapchat, sacked 20% of its workforce to restructure its business.