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HP in Palo Alto is eliminating as many as 6,000 jobs over the next three years amid declining demand for personal computers.
The company, which makes most of its money by selling computers, has been navigating a sustained downturn in PC demand.
It began with lower-end consumer products but has spread as companies reduce their workforces and curb technology investment, Chief Executive Officer Enrique Lores said.
Industry analyst Gartner Inc. said global PC shipments declined almost 20% in the third quarter — the biggest fall since it began tracking the metric in the mid-1990s. Dell Technologies in Texas, which generates 55% of its revenue from PC sales, on Monday gave a lackluster outlook for the current quarter and said some customers have “paused purchases” in the near term.
To manage costs, HP will cut as much as 10% of its 61,000-employee global workforce over the next three years and reduce its real estate footprint, Lores said. The company will incur an estimated $1 billion in restructuring charges, with about 60% in fiscal year 2023, which began this month. By the end of fiscal 2025, the plan should save as $1.4 billion a year, HP said in the statement.
Numerous tech companies have announced workforce reduction plans in recent weeks. Meta Platforms Inc. and Amazon.com Inc. each began cutting about 10,000 jobs while Twitter Inc. wiped out more than half its staff of 7,500 employees. Hard-drive maker Seagate Technology Holdings Plc. said it would cut about 3,000 jobs while Cisco Systems Inc. last week unveiled a plan to reduce an unspecified number of jobs and close offices.
While much of Silicon Valley is grappling with hiring freezes and job cuts, at least one social media company is still planning to keep hiring: TikTok.
The short-form video app remains committed to its goal of hiring nearly 1,000 engineers at its Mountain View office, a person familiar with the matter confirmed to CNN on Monday. This specific hiring target is related to the company’s goal of ensuring US user data is overseen by a team based in the United States amid scrutiny in Washington due to its parent company ByteDance’s ties to China.
TikTok CEO Shou Zi Chew confirmed the company was still recruiting during remarks last week at the Bloomberg New Economy Forum in Singapore, in response to the topic of layoffs at other tech companies, including Facebook-parent Meta and Amazon.
“We have always been more cautious in terms of recruitment,” Chew said at the conference. “At this stage of our growth, I think that our pace, our cadence, of hiring is just right for us.”
While the Federal Reserve’s battle against 40-year high inflation is still in its early stages, the president of the Federal Reserve Bank of San Francisco said she sees some “encouraging numbers.”
Mary Daly, speaking to a gathering of local business executives in Irvine, noted October numbers hinted at some success. For example, the overall Consumer Price Index rose at a 7.7% annual rate – the smallest increase since January.
But, Daly said, “there’s no one in the world who thinks 7.7% is close enough to say this is price stability. So we have a lot of work to do.”
The “work” translates to more rate hikes. The Fed upped its key rate target from near zero in March to up to 4%.
Another increase is on the agenda for the central bank’s next meeting in December. Eventually, Daly thinks the Fed Funds rate could get as high as 5.25%, depending on how the economy reacts to additional throttling.
Daly’s “encouraging numbers” centered on falling prices for some key consumer goods, such as clothing, furniture and used cars that were found within October’s CPI report.
Business columnist Jonathan Lansner, Bloomberg and CNN contributed to this report.
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