HP to cut up to 6,000 jobs as part of plan to 'Future Ready' PC company

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The axe is falling at HP (NYSE:HPQ). And while it might be a slow, prolonged cut, it's going to be noticeable nonetheless.

HP's (HPQ) announcement that it will shed between 4,000 and 6,000 jobs by the end of its 2025 fiscal year wasn't something that Chief Executive Enrique Lores was happy to disclose after Tuesday's market close. But Lores admitted that after a difficult fiscal fourth quarter, and not-so-great outlook, cutting potentially more than 10% of HP's (HPQ) workforce was necessary.

Lores said the job cuts are part of a strategy to create a "Future Ready" HP.

Speaking on a conference call to discuss HP's (HPQ) results and outlook, Lores said that the "ultimate goal" of the company is to develop its product portfolio and "operational capabilities to drive sustainable growth" and save as much money as possible during what is expected to be a prolonged period of economic uncertainty, inflation and some declines in customer demand.

To that end, Lores, and Chief Financial Officer Marie Myers said that the job cuts were part of a plan that would cut costs and generate "run rate savings" of at least $1.4B by the end of HP's (HPQ) 2025 fiscal year.

"We take [job] reductions very seriously," Myers said, and added that the steps HP (HPQ) was taking were "critical to the long-term health" of the long-time PC and printing technology leader.

But, in the meantime, factors such as "headwinds to long-term growth" are going to be around for a while.

Lores summed up the situation facing HP (HPQ) as it moves to "Future-Ready" itself by saying the year ahead would include "a challenging macro economy," and that he wasn't assuming there will be "a significant economic recovery" next year.

And those issues are reflected in HP's (HPQ) first-quarter outlook in which it expects to earn between 70 cents and 80 cents a share, excluding one-time items, while analysts had previously forecast the company to earn 86 cents a share.

HP (HPQ) also said that for all of its 2023 fiscal year, it believes it will earn between $3.20 and $3.60 a share, or below analysts' estimates for a profit of $3.61 a share.