HP’s layoffs will cut up to 6,000 jobs over three years

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Shane Snider

Palo Alto, Calif. the hardware giant’s notebook revenue fell 23% in the fourth quarter compared to the same period last year. CEO Enrique Lores says the “very tough decision” on workforce reduction is necessary as HP seeks to realize $1.4 billion in gross annual execution speed savings by 2025. “The writing was on the wall,” he says a channel partner.

HP Inc. on Tuesday said it will eliminate between 4,000 and 6,000 people from its workforce by 2025 after a tough fourth-quarter earnings report showed year-over-year revenue decline of 11.2% to 14, 8 billion dollars.

HP, headquartered in Palo Alto, California, had about 51,000 employees worldwide as of December 2021, according to a regulatory filing.

The company’s annual net revenue held at $63 billion in 2022, a decrease of 0.8% from 2021 net revenue. However, notebook sales decreased 23% to $6.4 billion following an overall weakening of the consumer PC market in 2022.

[RELATED STORY: Tech Layoffs In 2022: 23 Companies Slashing Their Workforce]

“These are the toughest decisions we have to make because they involve our colleagues,” HP CEO Enrique Lores said on an earnings conference call with analysts Tuesday after the news was disclosed at a media briefing.

During the previous briefing, Lores told CRN that channel partners can count on the firm’s continued support despite cost-cutting measures.

“Channel is how we go to market and how we handle most of our sales,” said Lores. “So clearly, this is something that we’re going to protect to make sure our channel partners continue to have the right relationships, the right connection, the right engagement with the business. Ensuring proximity to our partners is even more important than ever.”

Lores said that despite the challenges, the company has seen strong momentum in its growth portfolio, which grew to $11 billion in fiscal 2022, about $1 billion more than its anticipated goal. This portfolio includes games, peripherals, workforce services and solutions, consumer subscriptions, industrial graphics and 3D.

“What’s really important is that this builds a solid foundation,” he said. You said HP is “optimizing our portfolio, continuing to invest in growth areas and reducing complexity in our core business.”

Mike Turicchi, vice president of Gainesville, Va.-based NCS Technologies, said cost-cutting measures are needed during tough economic times. “I’m not surprised,” Turicchi said of HP’s three-year cost-cutting plan. “We’re hearing about a lot of companies that are really cutting the fat and looking at the bigger picture. We have a long way to go and I expect we will continue to see other companies cutting headcount. The writing was on the wall.”

Turicchi said that in light of the cost-cutting measures, channel retailers should look to diversify their offerings. “In general, channel partners and the big tech industry will feel the pinch and need to broaden their portfolios and look at different revenue streams.”

He said HP’s $3.3 billion purchase of Poly earlier this year allowed the company to take advantage of surging peripheral demand for hybrid work, and channel partners would good to follow suit. “If you look at the overall PC hardware trend, it was perfect for what HP did with the hybrid,” she said. “We will not go back to the way we were before the pandemic”.

In an earnings statement, HP’s Lores added, “We finished our fiscal year strong despite navigating a volatile macroeconomic environment and weakening demand in the second half. Looking ahead, the new Future ready strategy introduced this quarter will enable us to better serve our customers and drive long-term value creation by reducing our costs and reinvesting in key growth initiatives to position our business for the future.” .



    About Shane Snider

Shane Snider

Shane Snider is a senior associate editor covering personal computers, mobile devices, semiconductor news, hardware reviews, breaking news and live events. Shane is a veteran reporter, having worked for newspapers in upstate New York and North Carolina. He can be reached at ssnider@thechannelcompany.com.


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