HP Plans to Cut Thousands of Jobs
HP Inc. will slash as much as 16% of its workforce as part of a broad restructuring meant to cut costs and boost sales growth amid the company’s first change in top leadership in four years. The personal computer giant said it will cut 7,000 to 9,000 positions through firings and voluntary early retirement. The job reductions will help save about $1 billion by the end of fiscal 2022, the Palo Alto, California-based company said Thursday in a statement. HP had 55,000 employees as of a year ago, the last time it disclosed the figure.
The company released the projections as it faces a number of uncertainties. Dion Weisler, the chief executive officer who has shepherded the company since its 2015 split with Hewlett Packard Enterprise Co., is stepping down Nov. 1 due to family health reasons. The incoming CEO, Enrique Lores, is a longtime HP executive. The company’s printing business, a major source of profit, has seen falling sales and recently was dubbed a “melting ice cube” by analysts at Sanford C. Bernstein. And an activist investor may be building a stake in the company, a Gordon Haskett analyst speculated Wednesday.
“We see ourselves starting a new chapter for HP and we will be announcing bold moves to support that statement,” Lores said in an interview. “We have spent a lot of time building this plan. We can embrace the changes we see happening in the market and that can help us position the company for the future.”
After two-quarters of decline, the worldwide PC market grew 1.5% in the second quarter of 2019, according to Gartner, Inc. Lenovo was the top computer seller, followed by HP which saw its PC shipments increase 2.6% in the second quarter of 2019 versus the same period last year. Gartner said strong business PC demand boosted HP Inc.’s growth and offset weaker mobile PC shipments.
Two weeks ago, UBS analyst John Roy cut his rating on HP to Neutral from Buy and lowered his target for the stock price to $20, from $26. Roy wrote in a research note that he sees continued challenges for HP’s printer-supply business, which has come under some pressure recently in Europe from competition from third-party suppliers of ink and toner.