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HP India may fire 500 employees as part of global restructuring plan

The Palo Alto based company announced on Thursday that it expects to reduce gross global headcount by approximately 7,000-9,000 employees, or up to 16 per cent of its total workforce this fiscal, through a combination of employee exits and voluntary early retirement

twitter-logo BusinessToday.In        Last Updated: October 7, 2019  | 15:51 IST
HP India may fire 500 employees as part of global restructuring plan
The restructuring exercise is expected to result in annualised gross run rate savings of about $1 billion by the end of fiscal 2022

Although HP Inc on Monday announced that its global restructuring plan for fiscal 2020, which involves massive headcount reduction, is not country-specific, the India office is expected to take a hit. The personal computers and printers maker may cut nearly 500 jobs in India amid slowing PC growth, sources in the know told The Economic Times.

On Thursday, Enrique Lores, HP's incoming President and CEO voiced intentions to simplify the company's operating model and emerge a "more customer-focussed and digitally-enabled company" at a meeting with Wall Street analysts. By 2020, company expects to reduce gross global headcount by approximately 7,000-9,000 employees -from its total workforce of about 55,000 - through a combination of employee exits and voluntary early retirement.

"The company estimates that it will incur total labor and non-labor costs of approximately $1.0 billion in connection with the restructuring and other charges, with approximately $100 million in fiscal Q4 of 2019, $500 million in fiscal 2020 and the rest split between fiscal 2021 and 2022," HP said in a statement. These actions are expected to result in annualised gross run rate savings of about $1 billion by the end of fiscal 2022.

"This is a global restructuring and we're not breaking down numbers by site or location," HP Inc said in a statement, but did not disclose the number of job cuts in India. Nonetheless, the employees in India have cause for concern. "[HP's] India team is likely to see 500 job cuts. Even though India is a focus area for HP, the India team will see the impact of the global measure," Kris Lakshmikanth, CEO of The Head Hunters India, told the daily.

The fact that HP has discontinued some models in India amid slowing PC growth - apart from government project orders that are not consistent - also fans speculation of pink slips coming up.

The Palo Alto based company's announcement comes less than a month before Lores takes over from current head Dion Weisler, effective November 1. "We are taking bold and decisive actions as we embark on our next chapter," Lores told analyts last week. Significantly, the new restructuring plan comes on the heels of a similar three-year exercise that eliminated up to 5,000 jobs globally.

Also read: Slowdown Blues: Computer peripheral shipments slip as downturn bites

Also read: Apple's first India outlet to open at Maker Maxity mall in Mumbai's Bandra Kurla Complex

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