The shadow of the layoffs continues to spread across big tech. HP has announced this Tuesday that will lay off between 4,000 to 6,000 employees in the next three years. The world’s second-largest PC maker, behind Lenovo, says the job cuts are part of a restructuring plan whose main goals are to cut costs and optimize operational efficiency.
HP’s announcement comes amid a very turbulent month for corporate America and disappointing financial results for the company. In early November, Meta laid off 11,000 workers, Twitter cut its workforce by more than 50% and Amazon is preparing to lay off 10,000 people in what is considered the biggest adjustment in its 28-year history.
PC sales fall as HP announces cuts
The boom in the PC market that originated with the start of the pandemic seems to be lagging behind. HP has experienced in its last two fiscal quarters a drop in revenue. In the third quarter of this year, which ended on July 31, the company posted a 3% drop in its personal systems division, which includes PC sales, while the printing division fell 6%.
Things did not improve this last fiscal quarter, which ended on October 31. Revenues on personal systems were down 25%. Printing revenues, meanwhile, fell 7%. From a profitability standpoint, the US company said operating margin for the personal systems segment contracted to 4.5% from 6.9% in the previous quarter.
Shares of HP, meanwhile, fell about 22% on the year. The restructuring announcement, however, made HP shares rose about 1% after hours up to $29.95 (0.75% up at market close, trading at $29.38).
HP has indicated in a note to investors that the actions to be taken from now on will be framed within the “Future Ready” plan. It will consist, as we mentioned above, in cutting up to 10% of its workforce over the next three years and reducing office expenses. The company estimates that this will save about 1.4 billion dollars of its budget by the end of the fiscal year of 2025.
The plan, however, does not end there. HP, which in addition to selling computers also makes and supplies printers, has said that Consider expanding your subscription offering. It currently offers HP Instant Ink service plans that include ink or toner with home delivery for one monthly payment. The next step would be to expand subscriptions for printer paper and also computers.
As we have seen, several companies have announced restructuring plans. In this regard, we may see other Big Techs following the same path as they announce their financial results at the close of fiscal quarters. Google, which wants to classify 10,000 employees as “underperforming,” could be one of the next to announce layoffs.
Images: Wikimedia Commons | Mika Baumeister
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