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HP Inc will cut up to 6000 jobs – 11/23/2022 at 12:36


(AOF) – On the occasion of the publication of its fourth quarter accounts, HP Inc announced its intention to cut between 4,000 and 6,000 jobs by the end of the fiscal year 2025. The computer firm thus intends to save at least $1.4 billion annually. This restructuring will cost it around 1 billion dollars in restructuring charges, including 0.6 billion in the 2023 financial year, in progress, and the balance in the following two. HP Inc is facing a weak PC market.

In the fourth quarter, which ended at the end of October, HP Inc recorded a net loss of $2 million against a profit of $3.1 billion a year earlier. Excluding exceptional items, the group posted a profit of 85 cents per share, beating the consensus by 1 cent. Its revenue fell 11.2% to $14.8 billion against the market forecast of $14.69 billion.

In detail, PCs saw their revenues fall by 13% (-9% at constant exchange rates) to $10.3 billion. Revenue from consumer PCs in particular fell 25%.

HP Inc.’s printer business recorded sales down 7% (-6% at constant exchange rates) to 4.5 billion

For fiscal 2023, the PC and printer maker is targeting adjusted earnings per share of between $3.20 and $3.60 per share. Wall Street is targeting $3.61 per share.

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The lucrative database market

This mature global market is expected to generate more than $40 billion in revenue this year, compared to $22 billion in 2017, according to IDC. Contrary to its initial ambitions, SAP did not succeed in dethroning Oracle. This is mainly due to major developments in this market with the emergence of Amazon Web Services or Google Cloud. Benefiting from a significant competitive advantage as companies’ data hosts, these players have gained significant market share in recent years. However, faced with a growing corporate appetite for high value-added data, traditional players have a card to play.

Maximum staff turnover

Companies in the IT services sector have seen the departure of more than 20% of their workforce in twelve months. This trend is not unusual in the sector, but it is reaching an unprecedented scale, in a context of strong growth and good recruitment dynamics. In addition, employees have new requirements and aspirations. The main criterion is the flexibility of work and the way it is implemented in the company. The American-Indian company Cognizant saw around 35% of its 330,000 engineers leave the company in one year. Capgemini, grouping 32,000 French employees, recently suffered its first strike since 2008, with a demand for a collective increase in remuneration.

New ambitions of Samsung and Huawei on the market

Samsung recently unveiled four new laptops after it backed away from operating outside Korea in 2015. For his part, faced with the American sanctions which have penalized his activities in the field of smartphones since 2019, the founder of Huawei, called at the beginning of the year his employees to accelerate the diversification of the group. The Chinese giant recently displayed its ambitions in the PC/tablet market, which is one of the pillars of this strategy. To do this, it will have to compete with Lenovo in China and above all take market share in the United States and Western Europe, markets known to be difficult to penetrate.



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