HP, a manufacturer of computers and printers, plans to lay off up to 10% of its 61,000 global employees over the next three years. According to a Bloomberg article, the company’s revenues have apparently been impacted by the diminishing demand for personal computers (PCs), which is why they are taking this action.
According to the company’s chief executive officer Enrique Lores, the company’s earnings report predicts a 10% decline in computer sales for the fiscal year. We anticipate a difficult market climate, he said.
The decreased demand for PCs that HP was seeing initially only applied to lower-end consumer goods. But according to Lores, since businesses began laying off employees and cutting back on IT spending, the demand has gotten worse.
Global PC shipments reached 68 million units in the third quarter of 2022, down 19.5% from the third quarter of 2021, according to technology research and consulting firm Gartner. Since the company started keeping track of the PC market in the middle of the 1990s, this is the market’s greatest decline, and it has been declining year over year for four straight quarters. HP shipped 17,622 units in the third quarter of 2021. However, this number decreased to 12,706 within the same time period in 2022.
As a result of people purchasing computers to work or attend school from home due to the COVID-19 epidemic, PC shipments increased by 55% in 2021. The first quarter of 2022 saw a steep fall in this, indicating the end of the PC market’s pandemic boom.
About 60% of HP’s restructuring costs, totaling $1 billion, will be incurred in the fiscal year 2023. The corporation intends to save as much as $1.4 billion annually by the conclusion of the current fiscal year in 2025.
HP will try to invest in new business lines including subscription services as the PC market continues to decrease. According to Lores, the business will consider ideas for additional products like printer paper.
Source: Bloomberg (paywall)
