HP is the latest technology company to announce major layoffs. After a surge in demand for computer products amid pandemic-related lockdowns and restrictions, the computer retailer is adapting as consumer demand for laptops and desktops declines.
In its fourth quarter and fiscal year 2022 results shared Tuesday, HP announced it will cut 4,000 to 6,000 jobs by the end of fiscal 2025.
According to CNBC, HP had about 51,000 employees last October, so this week’s announcement is expected to affect about 7.8 to 11.8 percent of HP’s workforce.
PC demand plummets
The move comes as the pandemic-fuelled surge in demand for PCs plummets. Last month, Gartner reported that PC shipments worldwide fell 19.5 percent in the third quarter of 2022 compared to the third quarter of 2021, the sharpest decline since the mid-1990s and the fourth quarter in a row in the market. with a year-on-year decline.
According to data reported last month by Gartner and IDC, HP saw Q3 shipments drop from about 17.6 million units in 2021 to 12.7 million in Q3 2022.
For the fourth quarter, HP said net sales for its personal systems were down 13 percent year over year. Laptop sales fell 26 percent, while desktop sales fell 3 percent.
Printing net sales also fell 7 percent, while printing hardware shipments fell 3 percent. However, commercial net revenues increased significantly for both the personal systems and printing segments.
In an interview with Yahoo Finance, HP CEO Enrique Lores said the company would use the cost savings to invest in growth areas, such as gaming.
With HP being the second largest PC vendor (according to Gartner and IDC numbers), this all gives a snapshot of the economic struggles facing PC companies post-pandemic. According to Gartner and IDC, Lenovo, Dell, Asus, and Acer all saw PC shipments decrease from Q3 2021 to Q3 2022. However, Apple seems to be a standout; IDC reported that Apple sold more systems in the third quarter this year (about 10.1 million) than in the third quarter last year (about 7.2 million).
The decline in demand for PCs also affected other PC companies, including Intel, which said it is planning layoffs, likely in the thousands, and Microsoft had several layoffs this year.
Outside of personal computers, the wider tech world is seeing a large number of job cuts. Amazon is expected to cut 10,000 jobs, Meta laid off more than 11,000 employees this month, and Tesla CEO Elon Musk also announced layoffs in June. Speaking of Musk and lost jobs, Twitter’s recent high-profile layoffs have dramatically affected the company, including its reputation with the public and advertisers.
