‘These incremental structural savings will be a key lever to help offset macro and geopolitical uncertainties, while also continuing to fuel investments in our key growth areas and AI innovation, all designed to position as well for long term sustainable growth,’ HP CFO Karen Parkhill told investors during an earnings call Thursday.
HP Inc. plans to lay off up to 2,000 employees and incur approximately $150 million in restructuring costs as the tech firm battles the potential impact of new tariffs as well as competition in the PC market.
The Palo Alto, Calif.-based PC and printer maker said the job cuts should save the company an additional $300 million as part of its Future Ready program designed to restructure the company for efficiency. Future Ready is now on track to save HP $1.9 billion between 2023 and the end of this fiscal year.
“These incremental structural savings will be a key lever to help offset macro and geopolitical uncertainties, while also continuing to fuel investments in our key growth areas and AI innovation, all designed to position as well for long term sustainable growth,” HP CFO Karen Parkhill told investors during an earnings call Thursday.
HP expects “gross workforce reductions of approximately 1,000 to 2,000 employees” across its global workforce – reported as 58,000 in 2024 – according to a filing Thursday with the U.S. Securities and Exchange Commission.
HP CEO Enrique Lores said those cuts are part of the reason the company is confident it will reach the $3.6 billion in free cash with earnings per share of $3.16 it set in its guidance for the year, Lores told investors.
“There is both improvement on the revenue side, and improvement on the cost side and the combination of both is what drives us, brings us confidence in the guide that we have provided,” Lores said.
The world’s second largest manufacturer of PCs said it has also restructured its supply chain to ensure that by the end of the fiscal year, 90 percent of its North American products will be made outside of China.
“China will continue to be a relevant manufacturing hub for the rest of the world, but specifically for North America, less than 10 percent of the products will come from there, which is, as you know [a] very big change from where we were a few years ago,” Lores continued.
HP said it returned $400 million to shareholders last quarter through dividends and stock buybacks as quarterly revenue grew 2.4 percent to $13.5 billion.
HP said PC sales were up 5 percent year over year with revenue of $9.2 billion. HP’s commercial sales were up 10 percent while consumer sales dipped 7 percent. Total units sold were down 1 percent with commercial sales up 6 percent and consumer units down 11 percent.
According to IDC’s fourth-quarter tracking of PC shipments in 2024, second place HP gained market share from quarter to quarter, moving from 19.7 to 19.9 percent between frames.
“While our strategy is not to gain share for the sake of gaining share, you should expect us to improve our performance through the year in this segment, especially in the premium category worldwide,” Lores said on the call.
