HP to cut up to 6,000 jobs over three years on declining PC demand

HP Inc. said it will eliminate as many as 6,000 jobs over the next three years amid declining demand for personal computers that has cut into profits.

Earnings, excluding some items, will be US$3.20 to US$3.60 a share in the fiscal year ending in October 2023, Palo Alto, California-based HP said Tuesday in a statement. Analysts, on average, projected US$3.61 a share, according to data compiled by Bloomberg. Free cash flow will be about US$3.25 billion, which also falls short of estimates.

The forecast assumes a 10 per cent decline in computer sales in the fiscal year, Chief Executive Officer Enrique Lores said in an interview. “We expect a challenging market environment,” he said. 

HP, which makes most of its money by selling computers, has been navigating a sustained downturn in PC demand. It began with lower-end consumer products but has spread as companies reduce their workforces and curb technology investment, Lores said. Industry analyst Gartner Inc. said global PC shipments declined almost 20 per cent in the third quarter -- the biggest fall since it began tracking the metric in the mid-1990s. Dell Technologies Inc., which generates 55 per cent of its revenue from PC sales, on Monday gave a lackluster outlook for the current quarter and said some customers have “paused purchases” in the near term.