HP is planning to cut jobs by the end of its 2025 fiscal year, therefore, becoming the latest tech giant to take the strict move to minimise its operating costs. Announced during its post-earnings call and reported by Reuters, the company will likely lay off nearly 6,000 employees, which translates to roughly 12 per cent of its global workforce. The announcement by chief financial officer Marie Myers comes at a time when sales of PCs are sliding. Many tech giants such as Meta and Amazon also laid off thousands of workers owing to poor macroeconomic situations.
During the post-earnings call, Myers said that several recent challenges of 2022 would continue to continue in FY 2023. The report highlights that HP might incur about $1.0 billion in labour and non-labour costs related to restructuring and other charges, "with nearly $600 million in fiscal 2023 and the rest split between the following two years".
The company currently employs roughly 50,000 workers, and the restructuring would lead to 4,000 to 6,000 job losses. It remains unclear which departments would be impacted by the layoffs. HP also issued a statement and said, "As part of the actions we are taking, we will be reducing the size of our workforce by 4,000-6,000 people over the next three years. These are the toughest decisions we have to make, because they impact colleagues we care deeply about. We are committed to treating people with care and respect – including financial and career services support to help them find their next opportunity".
Last month, research firm Counterpoint highlighted that global PC shipments fell 15.5 per cent YoY in Q3 2022. HP, which has the second largest market share globally, shipped 12.7 million units in Q3 2022 versus 17.3 million units in Q3 2021. The author of the research, William Li, wrote, "Looking into 2023, the sky is still covered by dark clouds. We are also adjusting our 2022 shipment forecast to a 13% YoY decline on soft PC demand".
Apart from HP, Amazon and Meta recently laid off thousands of employees owing to macroeconomic situations. Twitter also laid off half of its workers last month and the company may fire a few more in the coming days and weeks. But it also plans to re-fill some key positions.
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