HP said Tuesday it expects to chop as much as 6,000 jobs by the top of fiscal 2025, or about 12% of its global workforce, at a time when sales of private computers and laptops are sliding as shoppers tighten budgets.
The PC maker also forecast a lower-than-expected profit for the primary quarter because it expects softness in each consumer and industrial demand.
“Lots of the recent challenges we have now seen in FY’22 will likely proceed into FY’23,” said chief financial officer Marie Myers during a post-earnings call.
HP estimates it can incur about $1.0 billion in labor and non-labor costs related to restructuring and other charges, with nearly $600 million in fiscal 2023 and the remainder split between the next two years.
The corporate, which employs nearly 50,000 people, said it expects to cut back headcount between 4,000 and 6,000.
The restructuring comes at a time when most corporations including Amazon, Facebook’s parent Meta Platforms and Cisco Systems are making deep cuts to their worker base to navigate a possible downturn within the economy.
HP forecast current-quarter profit between 70 cents and 80 cents. Analysts on average expect 86 cents, in response to Refinitiv data.
PC sales have shrunk from the heights hit in the course of the pandemic as households and businesses reduce spending within the face of decades-high inflation, putting pressure on corporations resembling HP and Dell Technologies.
Earlier on Monday, Dell reported a 6% fall in third-quarter revenue. The corporate’s Chief financial officer Tom Sweet said the continued macroeconomic aspects including inflation and rising rates of interest would weigh on customers next 12 months.
HP also reported a 11% fall in fourth-quarter revenue to $14.8 billion.
Shares of the Palo Alto, Calif.-based company were up nearly 2% in prolonged trading.