HP Inc. (HPQ), which makes personal computers, said it will cut 6,000 jobs over the next three years as declining sales negatively impact its profits.
HP has been struggling with a long-term decline in personal computer (PC) sales. It began with lower-end consumer products and has worsened as companies reduce their workforces and cutback on technology investments
Industry analyst Gartner says global PC shipments declined almost 20% in the third quarter of this year, the biggest drop since it began tracking the data in the 1990s.
To manage costs going forward, HP said it will cut up to 10% of its 61,000 global workforce over the next three years and reduce its real estate holdings.
The Palo Alto, California-based company said it will incur about $1 billion U.S. in restructuring charges due to the job cuts and real estate sales.
HP, which also makes printers, said it plans to invest in new lines of business such as subscription services.
News of the job cuts comes as HP issued earnings for the July through September quarter.
The company reported that its fiscal fourth quarter revenue fell 11% to $14.8 billion U.S., which was slightly better than analysts’ had expected. Profit came in at $0.85 U.S. a share, also above Wall Street forecasts.
Looking ahead, HP forecast earnings of $3.20 U.S. to $3.60 U.S. per share for its fiscal 2023 year. The forecast assumes a 10% decline in computer sales.
HP stock is down 23% this year and trading at $29.38 U.S. per share.
