John Paul M. Joaquin Tech 11.23.2022 05:Nov AM EST

HP to Layoff 6000 Jobs as Part of Restructuring Plans

HP is joining other tech companies in laying off its employees.

The popular tech giant recently revealed it would soon lay off many of its employees after its rapid growth and hiring spree during the onset of the COVID-19 pandemic.

HP is one of the latest tech companies to lay off a significant amount of its employees, with Meta, Twitter, and even T-Mobile laying off thousands of employees after pandemic-induced growth dried up.

HP Layoffs Details

HP mentioned in a recent statement that it expects to lay off 4000 to 6000 of its employees by the end of its 2025 fiscal year as part of its "Future Ready Transformation Plan," a restructuring scheme that reorganizes the company to a more cost-efficient one.

The plan will also allow HP to serve its customers better and drive long-term value creation for the company's future.

This restructuring could be the result of the 11% drop in its fourth-quarter revenues due to a decreased demand for computers after the onset of the COVID-19 pandemic.

The plan will cost HP $1 billion in labor and non-labor costs and other restructuring charges, but the company expects it will save $1.4 billion a year by the end of 2025 doing so.

The plan is a result of its recent revenue drop, with its report detailing that HP's fourth-quarter revenue dropped to $14.8 billion year-on-year, per Business Insider.

Although this drop still beats analysts' expectations from the tech giant, HP expects it will face a "challenging market environment" in the current fiscal year, which runs through Oct. 2023, at its current state, per HP CEO Enrique Lores.

According to the CEO, HP is already employing 61,000 people globally - a significant amount of people for a company of HP's caliber. As such, Lores is reluctant on laying off so many of its employees for the sake of restructuring, calling it "the toughest decision" the company has made.

The Consequences Of Rapid Growth

HP is one of the many companies in the tech industry to be laying off a significant number of its employees following the sudden rise in demand during the early onset of the COVID-19 pandemic, per CNN.

Meta, Amazon, Microsoft, and Twitter have all laid off many of their staff in the last few months due to their rapid growth and the effects of inflation.

You may remember that demand for consumer tech products like PCs, smartphones, tablets, and laptops suddenly increased in early 2020 as more and more countries enacted lockdowns and quarantines to prevent the spread of COVID-19, which led to the semiconductor shortage still being experienced today.

This sudden increase made tech companies like HP suddenly grow and hire more employees than they would normally have to accommodate the sudden increase in demand.

However, with the gradual easing of restrictions, lockdowns, and quarantines, people are starting to go out of their homes and are less reliant on consumer tech products to study, work, and pass the time, leading to a steadily decreasing demand for such products.