HP to cut 9,000 jobs as part of billion-dollar restructure
Incoming CEO Enrique Lores plans to make the company more “digitally enabled”
Between 7,000 and 9,000 HP employees from around the world will lose their jobs as part of wider restructuring efforts set to be finalised by the end of the 2022 fiscal year, the company has revealed.
Through executing a major plan, HP intends to simplify its operating model and become "a more digitally enabled company", in addition to optimising its cost structure.
The firm hopes to reduce its employee count by thousands through a combination of "employee exits" and voluntary early retirement. These job losses will incur costs of approximately $1 billion, when combined with other expenses connected with the restructure, to be spread across the next three years.
The plan has been announced little more than a month since Enrique Lores was appointed HP's incoming President and CEO, replacing Dion Weisler, who stepped down citing family reasons. Lores will take up his new position on 1 November.
"We are taking bold and decisive actions as we embark on our next chapter," he said.
"We see significant opportunities to create shareholder value and we will accomplish this by advancing our leadership, disrupting industries and aggressively transforming the way we work. We will become an even more customer-focused and digitally enabled company, that will lead with innovation and execute with purpose."
Lores started at HP more than 30 years ago as an engineering intern, and signalled his intent to 'reinvent' when he was named the firm's next chief, saying at the time: "I continue to be inspired by our customers, partners and employees, who are turning bold ideas into meaningful innovations. This is where we will set our sights for the future."
The restructure serves as HP's biggest strategic shift since spinning off HPE into a separate company four years ago. The company had to cut 34,000 jobs in 2014 due to "market pressures", and a further 30,000 ahead of the big split the following year.
The company has struggled somewhat in 2019, with its share price dropping by more than 10% in February due to weaker-than-anticipated performance in its printing supply business. HP UK, similarly, suffered an 85% drop in profits last year.
HP is hoping to generate a free cash flow of at least $3 billion for the fiscal year 2020. The company also estimates the restructure will lead to gross run rate savings of approximately $1 billion upon its completion.
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