Profit Slide At HP Can Only Mean One Thing: Hammer Time

HP says it intends to elbow up to 2,000 workers overboard with the aim to help it save up to $300 million in its current fiscal year that runs until October.

Confirmation of an "amendment to its current" multi-year "restructuring plan" comes days after it emerged that Enrique Lores, corporate captain of its tech tanker, was awarded $19 million in the most recent full financial year.

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"HP expects incremental gross workforce reductions of approximately 1,000 to 2,000 employees in connection with the amendment. The changes to the workforce will vary by country, based on local legal requirements and consultations with employee works councils and other employee representatives," it says in an SEC filing [PDF].

This equates to between 1.77 percent to 3.44 percent of the 58,000 people that HP employs. The cost-cutting programme began in fiscal 2023 and run to fiscal 2025 ended October 31, at which point HP says it'll have expunged $1.9 billion in expenses.

Jettisoning more staff is to incur $150 million in restructuring and other charges in connection with the "plan," and these total charges will amount to $1.2 billion over the three financial years.

Lores said he was "pleased" with the commercial performance for Q1 ended January 31, with the results published last night (UTC time). He added:

"Our progress was fueled by a strong commercial business in Personal Systems and momentum in our key growth areas, including AI PCs. We are focused on taking decisive action to address evolving market conditions in the near-term, while investing in our long-term growth."

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Karen Parkhill, HP CFO, who was awarded $15 million in fiscal 2024, added, "In Q1 we drove solid progress against our financial commitments for the year and are raising our Future Ready savings target from $1.6 to $1.9 billion dollars by the end of fiscal year 2025."

“We are holding our outlook for the year and remain focused on disciplined execution as we continue to invest for the future."

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The PC division, Personal Systems Group, reported 5 percent year-on-year revenue rise to $9.2 billion. Within this, Consumer was down 7 percent $2.57 billion and Commercial was up ten percent to $6.64 billion.

In the Printer wing of the organization, Supplies dropped 1 percent to $2.826 billion, Commercial Printing was down 7 percent to $1.14 billion, and Consumer Printing was up 5 percent to $299 million.

Total earnings before tax slid to $704 million versus $793 million, down 11 percent and a likely reason why HP decided to reduce the workforce more than expected. Tech businesses operating in a declining orbit need to keep those shareholders happy. ®