PC manufacturer, HP, is to cut up to 9,000 jobs in a restructuring push

(Reuters) – the U.S. personal-computer maker, HP Inc., said on Thursday to cut up to 16% of the global workforce, as part of a restructuring plan aimed at cutting costs.

It’s the logo for The Hewlett-Packard Company, it is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, New York, USA, on June 27, 2018. REUTERS/Brendan McDermid

The company will cut about 7,000 people and 9,000 jobs created as a result of the employee being terminated, as well as the voluntary early retirement, it said in a statement.

HP estimates that the plan would result in a gross annual run rate savings of approximately $1 billion by the end of fiscal 2022, it added.

The company has about 55,000 employees worldwide as of Dec. 31, according to a filing with the U.s. Securities and Exchange Commission. This would mean that up to 16% focus on spending cuts, Reuters calculations showed.

In connection with the restructuring, HP said it is expected to be at a total consideration of approximately for € 1 billion, of which $100 million will be recovered if the reports are in the fourth-quarter earnings.

“We are taking bold and decisive action if we are to embark on our next chapter,” said Enrique Lores, the incoming chief executive officer of the company.

“We see a tremendous opportunity to create shareholder value, and we will achieve this through the promotion of our management, the disruption of industries and aggressively to transform the way we do business.”

Lores will be taking over the CEO position on Jan. 1, according to Dion Weisler.

Palo Alto, California-based HP also said its board on Sept. 30 approved an additional $5 billion share repurchase program.

HP expects to generate free cash flow of at least $3 billion a year by 2020, and the rate of return of not less than 75% of the shareholders by way of a 10% quarterly dividend increase and share repurchase program, it will be added.

The company said that it expects that its adjusted earnings in the range of $2.22 to $2.32 per share, for the fiscal year by the year 2020.

For the current financial year, expects adjusted earnings in range of $2.18 to $2.22, the company said in reporting third-quarter earnings.

HP’s shares are down about 10% this year through Thursday’s close.

Reporting Shubham Kalia in Bengaluru; Editing by Christian Schmollinger Cushing and Christopher

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