HP to slash up to 4,000 jobs amid PC slump

HP's job cuts are expected to bring costs down amid slowing demand for personal computers and printers. Worldwide PC shipments in the third quarter fell 5.7 per cent, the eighth consecutive quarter of shipment decline.
HP's job cuts are expected to bring costs down amid slowing demand for personal computers and printers. Worldwide PC shipments in the third quarter fell 5.7 per cent, the eighth consecutive quarter of shipment decline.PHOTO: BLOOMBERG

Reductions over three years may include 1,000 outsourced jobs, expected to yield up to $416m in savings a year

SAN FRANCISCO • HP 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.

Mr 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, Mr Weisler said HP would need to accelerate a plan announced last year to eliminate about 3,000 positions over three years.

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," Mr 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 per cent in extended trading following the announcement.

Earlier, they had fallen 1.3 per cent to US$15.15 at the close in New York. The stock has gained 28 per cent this year.

According to research firm Gartner, worldwide PC shipments in the third quarter fell 5.7 per cent - the eighth consecutive quarter of shipment decline.

Gartner also said that this is the longest duration of decline in the history of the PC industry.

HP said the newest job cuts will generate cost savings of about US$200 million to US$300 million (S$278 million to S$416 million) annually starting in fiscal 2020.

The computer maker expects to take US$350 million to US$500 million in charges in connection with the plan, and of that total, about US$200 million will be labour costs, according to a regulatory filing.

The company also gave a forecast for fiscal 2017. Ms Lesjak said adjusted profit per share in the year that ends next October will be US$1.55 to US$1.65, compared with analysts' average estimate of US$1.61, according to data compiled by Bloomberg.

HP is boosting its planned quarterly dividend by 7 per cent to 13 US cents a share.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on October 15, 2016, with the headline 'HP to slash up to 4,000 jobs amid PC slump'. Print Edition | Subscribe