HP Inc. is planning to lay off a significant portion of its workforce, as much as 16 percent, in a major restructuring plan that will save around USD 1 billion by the end of fiscal 2022, the computing and printer giant said at its annual securities-analyst meeting. The last disclosed figure about employees showed that HP had 55,000 employees as of a year ago. Which means it could slash 7,000 to 9,000 jobs over the next three years. The changes are being shepherded by incoming Chief Executive Enrique Lores who will be takeover on November 1. Lores is a longtime HP executive and he will replace present CEO Dion Weisler who decided to step down in August sighting family health reasons. This is the first change in the top leadership of HP in four years.
The computer hardware maker said it will cut positions through voluntary early retirement and firings. HP is hopeful of making a profit of around USD 2.22 to USD 2.32 a share in fiscal 2020. The Palo Alto, California-based company has been under pressure because of a decline in the printing supplies business in recent quarters. Printing business was once the biggest source of moneymaking for the company. Before encountering difficulties in the printer business, the company was flourishing after split with Hewlett Packard Enterprise Co. in 2015. The company was founded by Bill Hewlett and Dave Packard in their garage in 1939.
HP historically sold printers at very affordable rates and then made money by selling ink cartridges. But Lores feels that it worked when the company’s goal was to penetrate more offices and consumers homes. But now consumers are more judicious and buying ink cartridges form other vendors at much cheaper rates, hurting its business. So the company has changed its strategy under which it will continue to sell printers at discounted rates but will lock customers into purchasing ink cartridges form HP. The company will also give the option to use third-party ink cartridges but then customers will have to purchase printer at a higher price.