HP reveals plans to cut 6,000 jobs as revenue dips 11%

HP Inc said it is planning to slash around 6,000 jobs by the end of fiscal 2025, or about 12 percent of its global workforce, to cut costs.
HP retail store London
The US-based PC maker also forecast a lower profit for the first quarter as it expects softness in both consumer and commercial PC demand. HP forecast current-quarter profit between 70 cents and 80 cents. HP does not reveal revenue forecast.

IDC report recently said the global PC shipments fell 15 percent to 74.3 million units during the third quarter of 2022. HP shipped 12.706 million units of PCs, accounting for 17.1 percent share vs 22.7 percent for Lenovo and 16.1 percent for Dell Technologies.

HP, the second largest PC maker in the world, reported 11 percent drop in fourth-quarter revenue to $14.8 billion. HP’s fiscal 2022 revenue fell 0.8 percent to $63 billion.

HP has generated revenue of $10.3 billion (–13 percent) from Personal Systems and $4.5 billion (–7 percent) from Printing during its fiscal 2022 fourth quarter.

HP’s Consumer PC revenue dropped 25 percent and Commercial PC revenue fell 6 percent. The number of PCs sold fell 21 percent with Notebooks units down 26 percent and Desktops units down 3 percent, HP said.

HP’s printing business said total hardware units fell 3 percent with Consumer units down 4 percent and Commercial units up 5 percent. HP’s printing revenue from consumer segment fell 7 percent and Commercial segment rose 1 percent.

“Many of the recent challenges we have seen in FY’22 will likely continue into FY’23,” said chief financial officer Marie Myers during a post-earnings call.

HP estimates it will incur about $1 billion in labor and non-labor costs related to restructuring and other charges, with nearly $600 million in fiscal 2023 and the rest split between the following two years.

The Palo Alto, California-based company, which employs nearly 50,000 people, said it expects to reduce headcount between 4,000 and 6,000.

On Monday, Dell reported a 6 percent drop in third-quarter revenue. Dell’s CFO Tom Sweet said the macroeconomic factors including inflation and rising interest rates would weigh on customers next year.