HP Inc that employs 55,000 globally, has drawn up a plan to lay off 16% of its workforce. This comes up to nearly 7,000 to 9,000 jobs that will be cut in the company. These may be done through a mix of straight forward firing and in some cases early voluntary retirement, as per a Bloomberg report.
These changes come in as Enrique Lores takes over at HP as the new CEO once the current incumbent Dion Weisler leaves on November 1.
In an official statement by the Palo Alto, California based company has shared more details. The reduction in workforce may result in a total saving of about $1 billion spread over three years. The cost of this restructuring will also be an equivalent $1 billion, which will be charge to the company’s accounts; $100 million in the current fiscal, or whatever is left of it, while figures for 2020 is likely to be $500 million.
The remaining $400 million will be reflected in the results of 2021 and 2022. The company has also made a profit projection for the next fiscal 2020 saying it would be in the $2.22 to $2.32 per share.
The key issue that the company will have to contend with is the falling sales graph as far as its printing unit is concerned. This is the company’s main business (HP Inc has separated from Hewlett Packard Enterprise Co in 2015) and can affect its overall profitability, one of the reasons behind this 16% staff reduction. The new CEO will have to walk the talk and see these plans are put into action. It is understood that the line functions may be spared the job cuts and most of it will cover the back-office support functions and at the corporate headquarters.
Some changes in the printing business are also in the offing. For starters, the company is expected to increase the prices of its hardware, particularly where the printers are compatible with cartridges other than HP. The HP ink only printers may be offered on lower prices. It is ultimately on the inks that the company makes its profits.