HP to cut up to 6,000 jobs over 3 years as PC demand falters

HP will eliminate as many as 6,000 jobs over the next three years amid declining demand for personal computers that has cut into profits.

The forecast is based on the company’s earnings report. It assumes a 10% decline in computer sales in the fiscal year, Chief Executive Officer Enrique Lores said in an interview. “We expect a challenging market environment,” he said. 

HP, which makes most of its money by selling computers, has been navigating a sustained downturn in PC demand. It began with lower-end consumer products but has spread as companies reduce their workforces and curb technology investment, Lores said.

Industry analyst Gartner said global PC shipments declined almost 20% in the third quarter — the biggest fall since it began tracking the metric in the mid-1990s. Dell, which generates 55% of its revenue from PC sales, on Monday gave a lackluster outlook for the current quarter and said some customers have “paused purchases” in the near term.

To manage costs, HP will cut as much as 10% of its 61,000-employee global workforce over the next three years and reduce its real estate footprint, Lores said. The company will incur an estimated $1 billion in restructuring charges, with about 60% in fiscal year 2023, which began this month. By the end of fiscal 2025, the plan should save as much as $1.4 billion a year, HP said in the statement.

“It’s an acknowledgment of the new realities of the printing and PC market,” said Woo Jin Ho, an analyst at Bloomberg Intelligence.

Shares gained about 1% in extended trading after closing at $29.38 in New York. The stock has dropped 22% this year.

Numerous technology companies, including Meta, Amazon, Twitter and Seagate, have announced workforce-reduction plans in recent weeks.

HP, which also makes printers, will look to invest in new lines of business such as subscription services. The Palo Alto, California-based company already offers ink subscriptions, and it will now explore plans for other products like printer paper, Lores said.