HP to cut 7,000 to 9,000 jobs

In yet another sign of a slump in personal computer sales, HP is planning on cutting 7,000 to 9,000 positions as part of a 2020 restructuring plan announced at today HP’s 2019 Securities Analyst Meeting in Palo Alto, California.

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The company said it would reduce its global headcount through a combination of employee exits and voluntary early retirement, which will incur total labor and non-labor costs of approximately $1 billion spread out over the next two years.

“We are taking bold and decisive actions as we embark on our next chapter,” said Enrique Lores, incoming president and chief executive officer, HP Inc. “We see significant opportunities to create shareholder value and we will accomplish this by advancing our leadership, disrupting industries and aggressively transforming the way we work.”

We will become an even more customer-focused and digitally-enabled company, that will lead with innovation and execute with purpose.

- Enrique Lores, incoming president and chief executive officer, HP Inc.

After two-quarters of decline, the worldwide PC market grew 1.5% in the second quarter of 2019, according to Gartner, Inc. Lenovo was the top computer seller, followed by HP which saw its PC shipments increase 2.6% in the second quarter of 2019 versus the same period last year. Gartner said strong business PC demand boosted HP Inc.’s growth and offset weaker mobile PC shipments.

Two weeks ago, UBS analyst John Roy cut his rating on HP to Neutral from Buy and lowered his target for the stock price to $20, from $26. Roy wrote in a research note that he sees continued challenges for HP's printer-supply business, which has come under some pressure recently in Europe from competition from third-party suppliers of ink and toner.