HP is the latest tech company to announce extensive layoffs. Following a surge in demand for computing products amid pandemic-related lockdowns and restrictions, the computer vendor is readjusting as consumer demand for laptops and desktops falls.
In its Q4 and fiscal 2022 results shared Tuesday, HP announced that it will eliminate 4,000 to 6,000 jobs by the end of fiscal 2025.
According to CNBC, HP had about 51,000 workers in October of last year, so this week’s announcement is expected to affect around 7.8–11.8 percent of HP’s workforce.
PC demand plummeting
The move comes as the pandemic-fueled surge in PC demand plummets. Last month, Gartner reported that PC shipments worldwide decreased 19.5 percent in Q3 2022 from Q3 2021, representing the steepest drop since the mid-’90s and the market’s fourth quarter in a row with a year-on-year decline.
According to the data reported by Gartner and IDC last month, HP saw Q3 shipments drop from around 17.6 million units in 2021 to 12.7 million in Q3 2022.
For Q4, HP said net revenue for its personal systems fell 13 percent year over year. Laptop unit sales decreased by 26 percent, while desktop unit sales fell by 3 percent.
Printing net revenue also dropped 7 percent, while printing hardware unit shipments fell 3 percent. However, commercial net revenue notably increased 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, like gaming.
With HP being the second largest PC vendor (by Gartner and IDC’s numbers), this all provides a snapshot of the economic struggles PC companies are facing post-pandemic. Lenovo, Dell, Asus, and Acer all saw PC shipments decline from Q3 2021 to Q3 2022, according to Gartner and IDC. Apple, however, appears to be a standout; IDC reported that Apple sold more systems in Q3 this year (about 10.1 million) versus Q3 last year (about 7.2 million).
Outside of personal computers, the broader tech world is seeing a large swath of job cuts. Amazon is expected to cut 10,000 jobs, Meta laid off over 11,000 workers this month, and Tesla CEO Elon Musk also announced layoffs in June. Speaking of Musk and lost jobs, the recent, highly publicized layoffs at Twitter dramatically affected the company, including its reputation with the public and advertisers.