HP Discloses Up To 1,000 Additional Job Cuts By Next Year
HP Inc. has increased the number of job cuts that are expected by the end of fiscal year 2019 by an additional 500 to 1,000 positions, according to a filing with the U.S. Securities and Exchange Commission.
In October 2016, HP had disclosed a plan to reduce its workforce by 4,000 positions by the end of fiscal 2019. However, "HP now expects approximately 4,500 to 5,000 employees to exit by the end of fiscal year 2019, subject to certain jurisdictional labor law requirements," the company said in the SEC filing.
The job cuts are taking place in connection with a restructuring plan aimed at helping HP to save money and focus on innovation. The Palo Alto, Calif.-based company has been investing heavily in bringing improved designs and new security capabilities to its existing core markets of PC and print, as well as focusing on future growth areas such as 3-D printing. The restructuring plan also followed the 2015 split of Hewlett-Packard into Hewlett Packard Enterprise and HP Inc.
HP's fiscal 2019 will run through Oct. 31, 2019. In a statement, HP said that with the extension of the restructuring plan first announced in 2016, "the number of employees impacted is approximately 1 percent of our workforce." The reduction is targeted to generate "additional gross annual run rate savings of approximately $75 million" starting in fiscal 2020, the company said in an SEC filing.
Douglas Grosfield, founder and CEO of Five Nines IT Solutions, a Kitchener, Ontario-based strategic service provider, said that it's expected that the restructuring roadmap would go through some changes since it was first laid out in 2016.
"It's probably not a huge surprise to most in the partner channel that there's going to be some additional room for reduction in staff, because there was an awful lot of overlap" with the enterprise side of the business, Grosfield said.
Overall, HP has been making smart moves in its core markets including PC in recent years, he said.
"They're obviously doing something right, because they've got some really cool products," Grosfield said. "HP is always something that we talk about when we're talking about cool new technologies [with customers], and that wasn't the case not too many years ago."
The disclosure comes as HP is showing a number of positive signs in its core businesses. The company's fiscal second quarter, which ended April 30, saw double-digit sales growth in both the personal systems and printer segments for HP.
The quarter marked the sixth consecutive quarter of double-digit growth for the personal systems division. HP CEO Dion Weisler said in May that it's an important sign that personal systems "grew double digits yet again, off the back of double digits this time last year."
HP's fiscal second quarter also marked the fifth consecutive quarter where the company's personal systems and printing businesses grew together. Overall, revenue grew 13 percent year over year during the quarter for HP to $14 billion.
HP held the top spot on worldwide PC market share during the first three months of the year, with 20.8 percent of PC sales, and finished No. 2 behind Dell in U.S. market share with 28.4 percent, according to research firm Gartner.
HP's second quarter also showed strong momentum in the nascent 3-D print business, Weisler said -- with a "strong uptick" in orders from manufacturing customers, including numerous repeat orders.
One customer, longtime 3-D printing services firm Forecast 3D, is "expanding and upgrading its entire fleet" with HP's latest Multi Jet Fusion model, the 4210, Weisler said.
"I am absolutely convinced that it is very disruptive technology to tap into the $12 trillion manufacturing market," he said.