HP Plans Up to 4,000 Job Cuts Over Three Years Amid PC Slump
- The company will eliminate positions across the board
- HP has about 50,000 employees now
- Newest job cuts will generate cost savings of up to $300 million
HP Inc. plans to cut 3,000 to 4,000 jobs over the next three years to help bring costs in line with slumping demand in the market for personal computers and printers.
The company will eliminate positions across the board, Chief Executive Officer Dion Weisler said on Thursday. The comments came as HP held its analyst meeting in New York. The reductions could include about 1,000 jobs being outsourced if the number of positions edges close to 4,000, Chief Financial Officer Cathie Lesjak said.
Weisler is searching for additional ways to drive profitability after his PC company gained independence last year from Hewlett Packard Enterprise, which sells corporate tech gear. Earlier this year, Weisler saidHP would need to accelerate a plan announced in 2015 to eliminate about 3,000 positions over three years. Instead, those reductions are to be completed this fiscal year. HP has about 50,000 employees now.
“As technology improves and as we become a faster, nimbler company, you are always looking to become more and more efficient,” Weisler said in an interview. “Efficiency wins the day. And when I think about the markets that we’re in, what’s important is that we remember to stay focused on the reinvention, the innovation that we’re driving.”
The company’s shares slipped 1.8 percent in extended trading following the announcement. Earlier, they had fallen 1.3 percent to $15.15 at the close in New York. The stock has gained 28 percent this year.
HP said the newest job cuts will generate cost savings of about $200 million to $300 million (roughly Rs. 1,337 crores to Rs. 2,005 crores) annually starting in fiscal 2020. The Palo Alto, California-based computer maker expects to take $350 million to $500 million (roughly Rs. 2,340 crores to Rs. 3,343 crores) in charges in connection with the plan, and of that total about $200 million will be labor costs, according to a regulatory filing.
The company also gave a forecast for fiscal 2017. Lesjak said adjusted profit per share in the year that ends next October will be $1.55 to $1.65, compared with analysts’ average estimate of $1.61, according to data compiled by Bloomberg. HP also is boosting its planned quarterly dividend by 7 percent to 13 cents a share.