Add the PC maker, HP will lay off approx 6,000 employees over the next three years

HP, which cut off about 9,000 employees three years ago, has indicated that another wave of layoffs is on the way. HP will lay off approx 6,000 employees over the next three years as a part of a bigger restructure outlined by HP during its fourth-quarter results conference held recently.

The corporation believes that its "Future Ready Transformation Plan" would save it US$1.4 billion by the end of fiscal 2025, and HP will lay off employees that could be anywhere near 4,000. "HP intends to cut gross global headcount by 4,000-6,000 people," the firm added. "These steps will be completed by the end of fiscal 2025." Following the tech layoffs, the HP layoffs are a big blow to the industry. The IT industry is facing layoffs all around the world, with companies like Amazon, Meta, Microsoft, and Intel all announcing that staff would be asked to leave without any negotiations.

HP employs around 51,000 people worldwide. In the most recent fiscal quarter, revenue fell by more than 11% year on year to US$14.8 billion. CEO Enrique Lores attributed the company's dismal performance to macroeconomic conditions and "softening demand" for PCs and printers.

In the instance of HP, the business unveiled a Future Ready Transformation strategy for the fiscal year 2023, which is projected to generate "substantial structural cost reductions through digital transformation, portfolio optimization, and operational efficiency." HP estimates that these efforts, including layoffs, will save at least US$1.4 billion in annualized gross run-rate savings by the end of fiscal 2025. "The company estimates it will incur approximately US$1.0 billion in labor and non-labor costs related to restructuring and other charges, with approximately US$0.6 billion in fiscal 2023 and the remainder split approximately equally between fiscal 2024 and 2025," HP stated in a press release.

In its fourth-quarter earnings report, HP stated that sales were down 0.8% year on year. Furthermore, revenue from the laptops and PCs division fell 13% to US$10.3 billion. Revenue from the printing industry fell 7% to US$4.5 billion. "Total hardware units fell 3%, with consumer units down 4% and commercial units rising 5%." Consumer net sales fell 7%, while commercial net revenue increased by 1%. "In constant currency, supplies net sales were down 10%," HP said in its quarterly results.

During the company's Q3 2022 earnings call this week, Dell CFO Tom Sweet expressed similar thoughts. "Using our Q4 projection as a starting point, it's likely that next year's revenue will be below historical sequential," Sweet said, citing global macroeconomic concerns such as "slowing economic growth, inflation, increasing interest rates, and currency pressure."

Thousands of people have lost their employment as a result of macroeconomic uncertainty. According to layoffs.fyi, 137,159 employees have been laid off so far in 2022, excluding HP. According to Crunchbase data, 73,000 tech workers will be laid off in the United States by 2022.

HP isn't the only technology business that has announced big job layoffs in recent weeks. Following Elon Musk's takeover of Twitter on October 27th, the firm went through many waves of layoffs. This month, Meta and Amazon both announced layoffs. In the case of the social media behemoth, the 11,000 employees laid off on November 9th were the first in the company's history.

Meanwhile, layoffs at Twitter can be ascribed to Elon Musk's leadership and ownership shift, but they were unavoidable based on the company's financial statement.

"The customer input is very similar to what we reported in Q2, extremely cautious and deliberative conduct in the face of there's a lot of economic — macroeconomic variables out there," Dell Co-COO Chuck Whitten added. So, we're hearing budget reassessment, reprioritization of spending, and customers buying only for their immediate needs."

Apple appears to be the only company surviving the downturn, with revenue increasing by 8.14% to $90.14 billion in Q3 2022. Apple also reported its highest-ever revenue of US$394.32 billion in the fiscal year 2022.

Apple CFO Luca Maestri, on the other hand, revised the company's revenue outlook for Q3 2022 (or Q1 FY 2023) to be 8.1% lower quarter over quarter. Apple typically publishes its biggest statistics in the December-ended quarter, so an 8.1% dip from the previous quarter's $90.14 billion would be a significant departure from the company's past Q4 results.

HP is currently trading at a 22.72% discount to its January 2022 share price.