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HP currently has about 58,000 employees.
American tech company HP Inc. has planned to lay off 4,000 to 6,000 employees globally. This plan of the company will be completed by the end of FY28 i.e. fiscal year 2028. The company says that the cost of memory chips is increasing rapidly, due to which this decision was taken.
Also, operations are being streamlined to increase focus on AI i.e. Artificial Intelligence. This will result in gross savings of $1 billion i.e. Rs 8,927 crore to the company in three years.
The company currently has about 58,000 employees
HP CEO Enrique Lores said in a media briefing on Tuesday that product development, internal operations and customer support teams will be most impacted. The company currently has about 58,000 employees. Earlier this year also, the company had laid off 1,000 to 2,000 employees.
Memory chip prices increase problems
The demand for memory chips is increasing rapidly in the tech sector, especially due to data centers. Morgan Stanley analysts have warned that this will increase profit pressure on companies like HP, Dell and Acer.
HP says that these rising expenses are canceling out the benefits of the PC sales cycle. The company said that the impact will be less in the first half due to inventory, but will be cautious in the second half.
HP had laid off 6,000 employees three years ago also.
“We are adding more memory suppliers, reducing memory where it is not needed, and increasing efforts where it is needed,” Lores said. Apart from this, manufacturing of products for North America is being shifted out of China, so that the impact of tariffs is reduced.
HP sales increased by 4.2% in the fourth quarter
In the fiscal fourth quarter, HP’s sales increased by 4.2% to $ 14.6 billion i.e. Rs 1.30 lakh crore. PC unit earnings were up 8% as demand for Windows 11 machines and AI PCs increased.
PCs with AI covered more than 30% of shipments in Q4. But printer unit sales fell by 4% to $4.27 billion i.e. Rs 38,111 crore. Adjusted profit came in at 93% per share, slightly better than analysts’ estimate of 92%.
HP will use AI to accelerate product development, increase customer satisfaction and improve productivity. Lors said, ‘It is necessary to take this step so that the company remains competitive.’
Even 3 years ago, HP had laid off 6,000 employees.
Even three years ago, HP had planned to reduce 4,000 to 6,000 jobs, when the company’s employee count was 61,000. This resulted in savings of $2.2 billion (Rs 19,634 crore). The current plan would entail restructuring charges of $650 million (Rs 5,801 crore), which includes $250 million (Rs 2,231 crore) in FY26.
The company estimates full-year adjusted profit at $2.90 (Rs 258) to $3.20 (Rs 285) per share, while analysts were expecting $3.32 (Rs 296). The period ending January will see profit per share of 73% to 81% compared to analysts’ forecast of 78%.
Retrenchment continues in tech sector
There is a trend of reducing jobs in the tech industry. Amazon has recently cut more than 14,000 jobs, which is about 10% of its 3.5 lakh corporate employees. After increasing hiring during the pandemic, efforts are now being made to control expenses. Meta also eliminated hundreds of roles in AI operations.
Apple has also given pink slips to dozens of employees as part of the reorganization in the sales division. 20 rolls have already gone in Australia and New Zealand. HP’s layoffs are also part of this chain. According to Reuters, Amazon has reduced 30,000 corporate positions after the pandemic.
What will be the impact in future?
HP will benefit from $1 billion in savings over three years, but restructuring costs will put pressure in the short term. The growth of AI PCs will keep the PC segment strong, but memory chip problems will be a challenge in the second half. “We will remain cautious on guidance, but are taking aggressive action,” Lores said.
Analysts believe that if memory prices are not controlled, profit margins will be affected. The company will try to increase market share by focusing on AI innovation. There will be an impact of 7%-10% on the global workforce, which reflects the overall trend of the tech sector.
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