HP plans to cut up to 6,000 jobs amid falling PC demand

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HP is the latest tech company to announce mass layoffs. Following a surge in demand for IT products amid pandemic-related lockdowns and restrictions, the PC vendor is readjusting as consumer demand for laptops and desktops declines.< /p>

In its fourth quarter and fiscal year 2022 results released Tuesday, HP said it would cut 4,000 to 6,000 jobs by the end of fiscal year 2025.

According to CNBC, HP had about 51,000 workers in October last year. This week's announcement is therefore expected to affect approximately 7.8-11.8% of HP's workforce.

Drop in PC demand

The move comes as pandemic-fueled PC demand plummets. Last month, Gartner reported that worldwide PC shipments fell 19.5% in the third quarter of 2022 compared to the third quarter of 2021, the steepest drop since the mid-1990s and the fourth consecutive quarter of the market with a year-over-year decline.

According to data reported by Gartner and IDC last month, HP saw its third-quarter shipments drop from approximately 17.6 million units in 2021 to 12.7 million in the third quarter of 2022.

For the fourth quarter, HP said its Personal Systems net sales fell 13% year-over-year. Laptop unit sales fell 26%, while desktop unit sales fell 3%.

Printing net revenue also fell 7%, while printing hardware unit shipments fell 3%. However, commercial net revenue increased significantly for the personal systems and printing segments.

In an interview with Yahoo Finance, HP CEO Enrique Lores said the company would use the savings to invest in growth areas, such as gaming.

With HP being the second-largest PC vendor (according to figures from Gartner and IDC), all of this gives some insight into the economic difficulties 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, seems to stand out; IDC reported that Apple sold more systems in the third quarter of this year (approximately 10.1 million) compared to the third quarter of last year (approximately 7.2 million).

The drop in PC demand has also affected other PC makers, including Intel, which has said it expects layoffs, likely in the thousands, and Microsoft has made a few layoffs this year.

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Apart from personal computers, the wider tech world is seeing a wide range of job cuts. Amazon is expected to cut 10,000 jobs, Meta laid off more than 11,000 workers this month, and Tesla CEO Elon Musk also announced layoffs in June. Speaking of Musk and job losses, the recent, high-profile layoffs at Twitter have significantly affected the company, including its reputation with the public and advertisers.