HP has announced that it will lay off between 4,000 and 6,000 people as part of a cost-cutting campaign aimed at adding $1.4 billion to its bottom line in the coming years. The announcement was made on the occasion of the publication of the annual results of HP, which closes its accounts on October 31.
The company, which currently has about 61,000 employees, some 10,000 more than a year ago, revealed the plan along with its results for the fourth quarter of 2022, which recorded revenue of $14.8 billion. down 11% year-over-year (and 8% in constant currency), and operating profit of $1.3 billion. For the full year, revenue fell one percent to $63 billion and operating profit was $6.6 billion.
This new strategy will allow us to better serve our customers and create long-term value by reducing our costs and reinvesting in key areas for the future, said an HP spokesperson. The company’s printers generated $3.7 billion of that profit on revenue of $18.9 billion – a somewhat better performance than the $2.9 billion profit on revenue $44.1 billion related to PCs.
Chairman and CEO Enrique Lores described the results as a strong year-end, despite a volatile macro environment and slowing demand in the second half, but added that HP needed a strategy – which he dubbed “Future-Ready Transformation Plan – to achieve significant structural cost savings through digital transformation, portfolio optimization and operational efficiency”.
Tech companies large and small have slowed hiring plans or announced workforce reductions in recent months to weather a possible economic downturn, among other things. Microsoft, led by Satya Nadella, is one of the first tech giants to lay off employees as part of a realignment. A Microsoft spokesperson said: We have made a small number of job cuts. Like all companies, we regularly assess our professionals and make structural adjustments accordingly. “We have notified a small number of employees that their roles have been eliminated,” a Microsoft spokesperson said.
Intel is also facing a sharp drop in demand for PC processors, its core business, and has struggled to regain market share lost to rivals like Advanced Micro Devices. In July, the company warned that 2022 sales would be about $11 billion lower than its forecast.
The company has announced a significant reduction in its workforce, likely in the order of several thousand people, in order to reduce costs and cope with a depressed personal computer market. According to people with knowledge of the situation, the company-wide job cuts will hit sales and marketing particularly hard.
Meta Platforms, Facebook’s parent company, lowered its goal of adding software engineers this year from 10,000 to around 6,000 to 7,000. Amazon’s retail division also lowered its hiring goal for 2022. Tesla announced on July 14 that it was laying off 229 data annotation employees who are part of the company’s large Autopilot team and is closing the San Mateo, Calif., office where they worked, according to a filing. California regulations. The self-driving technology company headquartered in Pittsburgh.
Oracle, founded by Larry Ellison, one of the tech giants is also laying off employees as part of a realignment. The company has laid off more than 200 employees in California, amid cost-cutting plans to save $1 billion.
Amid the layoffs at HP, CEO Enrique Lores sees a clear opportunity to simplify, streamline and reduce capital expenditure. In 2021 and 22, due to component shortages, we had to double investment in boards, in many different parts, to compensate for component shortages,” Lores said.
In doing so, HP has created more product variants. But he also hinted that some product lines might disappear. For example, in the personal systems industry, there is an opportunity to significantly reduce the number of unique stock keeping units (SKUs), he said.
HP also has a plan to sell more hardware by combining its own products with those of Poly. We are announcing a definitive agreement to acquire Poly, a leading global provider of enterprise collaboration solutions, in a transaction to $40 per share, representing a total value of $3.3 billion, including Poly’s net debt, HP disclosed in March.
We will also be expanding our consumer service offerings beyond Instant Ink to include new areas such as paper and printing materials, Lores revealed to investors – before later blurting out that consumer ink public as a service is more cost-effective than managed print services for businesses.
Lores said savings from the Future Ready Transformation plan will be the main driver of improved results in the second half of 2023, and that the company will stop buying back shares in order to have the necessary cash to face what the PDG said to be a difficult macroeconomic environment for the coming year.
As of October 2021, HP had approximately 51,000 employees. In 2019, HP announced that it would cut between 7,000 and 9,000 employees. HP said revenue for the fourth fiscal quarter, which ended Oct. 31, fell 0.8% year-over-year to $14.80 billion.
Revenue in the personal systems segment, which includes PCs, fell 13% to $10.3 billion, as units fell 21%. Consumer revenues in this segment fell 25%. Printing sector revenue of $4.5 billion was down 7%, while the number of units was down 3%.
In the prior quarter, Personal Systems revenue decreased 3% and Printing revenue decreased 6%. From a profitability perspective, HP reported that the Personal Systems segment’s operating margin contracted to 4.5% from 6.9% in the prior quarter.
Source : Vido
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