Some 9,000 workers at HP Inc are about to lose their jobs in the coming months as the company undertakes a major facelift - and decided there is more money to be made in the software and services business this time.
The decision, "one of the toughest" the company said it had to make, is necessary for its survival, Enrique Lores, incoming chief executive officer, disclosed during a conference meeting with key market analysts.
Lores had been tasked to oversee the company's department that includes its lucrative market of sale of ink products for large enterprise printing systems prior to his appointment as the firm's top executive in late August.
A financial strategy for the company's future campaign was presented by chief finance executive Steve Fieler and Lores for HP's 2020 roadmap moments before the conference with key market experts.
HP Inc will trim down its workforce by 13 percent to 15 percent affecting more than 50,000 staff in major parts of the world to save around a billion dollars in operational expenses. The money saved from cutting on extra costs would be allocated in software as part of the company's "reinvention", Lores disclosed.
HP Inc said that corporate transformation will emerge from shifting personal computing as well as printing with serious attention to new services, stretching beyond just equipment to create a "true end-to-end solutions" for its global clients.
Shares of the company were down 3.1 percent at $17.82 during extended sessions on Thursday. The personnel terminations come as the Palo Alto, CA-based company concludes a 3-year revamp that included the layoff of more than 5,000 workers.
The bottom line effect, according to projections by Fieler, is a non-generally accepted accounting principles earnings of $2.21 to $2.33 per share for the fiscal year 2020. In a survey conducted by FactSet, it said that market analysts see $2.25 per share. Furthermore, the company hiked its dividends by around 10 percent on top of $5 billion for future projects of its outstanding stocks.
HP Inc. was established in 2015 when Hewlett Packard separated from it's desktop and printer business from its data-center hardware and software operations now called the Hewlett Packard Enterprise. The following year, the company announced that more than 4,000 employees would be laid off by the end of 2019.
"The (transformation) goes with the territory," International Data Corporation president Crawford Prete told Market Watch. HP Inc is now attempting to streamline its global ventures and put more money in new trade models, Prete said.
