What just happened? HP Inc. has announced it is joining the slew of tech companies that have drastically reduced their headcount. The hardware giant said it would cut up to 6,000 jobs, or around 12% of its global workforce, by the end of fiscal 2025 as demand for laptops and PCs wanes.
This year has seen HP's net revenue fall 0.8% ($63 billion) compared to 2021, while notebook sales were down 23% to $6.4 billion. The company's fiscal fourth-quarter revenue was down 11% to $14.8 billion, while profit was 85 cents per share, both of which beat analysts' estimates.
HP forecasted a lower-than-expected profit for the first fiscal quarter, based on a predicted 10% decline in computer sales. It estimates that labor and non-labor costs related to restructuring and other charges will cost it around one billion dollars over the next three years.
HP expects to reduce its 61,000-strong global workforce by between 4,000 and 6,000 people before the end of 2025. "These are the toughest decisions we have to make because it involves our colleagues," said CEO Enrique Lores.
The combination of post-lockdown market softening and economic uncertainty has seen demand for consumer electronics crash this year. Phones, tablets, Chromebooks, and gaming monitors are just some of the industries that have been impacted. PC makers are also feeling the effects—IDC's latest figures show HP Inc. experienced the largest shipment decline of all top-five manufacturers in Q3 (-27.8%).
HP said it would invest in new business lines, including subscription services. It plans to expand its ink cartridge subscription service to products such as paper and computers, said Lores.
It's not a good time to be a worker at a big tech company. Meta laid off 11,000 people recently, and the situation at Twitter lurches between tragedy and comedy. We've also seen layoffs at Lyft, Microsoft, Snap, Tesla, Robinhood, and several others this year. In the case of Elon Musk's companies, the lack of prior notice resulted in lawsuits against the firms. With the economy showing little sign of recovery, expect to see more stories like this in the coming months.