Hewlett Packard, popularly known as HP, a brand which used to be synonymous to being a pioneer in computer technology in its glory days, is facing some tough times. Despite splitting into two seperate entities last year, HP Inc. has only seen a declining demand for its products. Thus, the company has today announced a restructing plan, which of course, includes job cuts over next three years.
Putting things in perspective, Dion Weisler, President and CEO of HP Inc says,
I’m proud of the progress we have made in our first year as the new HP. Our focus is clear, our execution is solid, and we are positioned well for the next step in our journey.
According to a regulatory filing, the company’s restructing plan primarily revolves around streamlining its workforce. HP Inc. is expected to let go of about 3,000 to 4,000 employees over the next three years, i.e by the end of fiscal year 2019. The company currently employs over 50,000 people, and the aforemntioned figure a major chunk of it.
HP, in the regulatory filing, also adds that changes to workforce will vary with location, and will depend on local legal requirements and consultations with employee work councils, and other employee representatives as well.
The restructing process is likely to be completed by the end of fiscal 2019, and will incur charges along the lines of $350 million to $500 million. Out of this massive figure, over $200 million can be attributed to reducing the size of its workforce. But, beginning in fiscal 2020, this complete process is expected to earn the company about $200 million to $300 million per year.
In addition, the company also posted adjusted fiscal 2017 earnings in the range of $1.55 to $1.65 per share, which is compareable to analyst estimates of $1.64 per share. Without half a billion in net capital expenditures, Hp Inc. also expects a free cash flow outlook in the range of $2.3 to $2.6 billion. But, it plans to return as much as three quarters of it to shareholders by raising the dividend by 7 per cent.
The company is aggressively working towards reinstating its concrete stance in the computer and printer market. It has recently picked up Samsung’s printing division for a whopping $1.05 billion. But, this could be contrasting to today’s developments where the company is actually cutting 4,000 jobs and adding 6,000 others from the purchase of this printer business.
Earlier this year, the software products arm, Hewlett Packard Enterprise(HPE) also announced about 3,000 jobs cuts. And just weeks ago, it announced a $8.8 billion merger of its ‘non-core’ software assets with a British software company, Micro Focus, to form a new combined entity.