HP executives announced their financial results and they are not good at all, with a net profit loss of 51%, which is a very low result and is forcing the company to make budget cuts.
HP: Its profits fall 51% and plan 6,000 layoffs
“Companies are delaying their [sales] refresh cycle,” Enrique Lores, HP’s CEO told MarketWatch in an interview ahead of the release of its fiscal fourth-quarter results.
One of the most troubling data is that of HP product shipments, which fell sharply by 27.9% year-on-year, the biggest drop among the top five manufacturers, and its market share also fell to 18.7%, which widens the gap between the manufacturer and Lenovo, one of its main competitors.
In turn, HP also announced its plan of massive layoffs between now and the next three years, something that other companies have also announced, such as Meta, Microsoft, Intel, Seagate, and Philips, among others.
There is talk of layoffs of between 4,000 and 6,000 employees between now and the next three years. This amount is about 10% of HP’s total workforce. The manufacturer employed about 51,000 people at the same time last year. For this fiscal year, HP was already planning to cut between 7,000 and 9,000 staff, so these are going to be further job cuts.
HP is one of those hit hard by the drop in demand for desktops, one of the biggest recorded in recent years, so these measures are being made to take that hit.
“HP’s modest guidance, coupled with an incredibly challenging macro for the PC and peripherals business, is a real concern and PC buying is likely to be lower over the next four quarters and possibly more, with pandemic-driven refresh cycles dragging down much of the demand,” Daniel Newman, principal analyst at Futurum Research, told MarketWatch.