The computer maker has also warned investors that it expects lower-than-expected profit in the first quarter amid softening demand from both retail and commercial buyers
The personal computer and laptop maker on Tuesday said that it expects to cut 6,000 jobs or 12 per cent of its global work force by the end of financial year 2025 as it forecast sales of computers and laptops to fall as people tighten their budgets amid spiraling inflation across the world. The job cuts by computer maker come after Amazon, Meta and Twitter announced job cuts.
The computer maker has also warned investors that it expects lower-than-expected profit in the first quarter amid softening demand from both retail and commercial buyers, news agency Reuters reported.
"The company expects to reduce gross global headcount by approximately 4,000-6,000 employees. These actions are expected to be completed by the end of fiscal 2025," HP said in a press release on Tuesday.
Personal systems net revenue was $10.3 billion, down 13 per cent year over year (down 9 per cent in constant currency) with a 4.5 per cent operating margin. Consumer net revenue decreased 25 per cent and commercial net revenue decreased 6 per cent. Total units were down 21 per cent with notebooks units down 26 per cent and desktops units down 3 per cent.
"Many of the recent challenges we have seen in FY'22 will likely continue into FY'23," Reuters quoted chief financial officer Marie Myers as saying during a post-earnings call.
The company estimates that it will incur approximately $1.0 billion in labour and non-labour costs related to restructuring and other charges, with approximately $0.6 billion in fiscal 2023, and the rest split approximately equally between fiscal 2024 and 2025, HP said.
Job cuts by HP come after a slew of tech giants like Amazon, Facebook parent Meta and Twitter announced job cuts owing to fears of recession in the US economy.
PC sales have shrunk from the heights hit during the pandemic as households and businesses reduce spending in the face of decades-high inflation, putting pressure on companies such as HP and Dell Technologies.
Earlier on Monday, Dell reported a 6 per cent fall in third-quarter revenue. The company's Chief financial officer Tom Sweet said the ongoing macroeconomic factors including inflation and rising interest rates would weigh on customers next year.