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Computer and printer manufacturer Hewlett-Packard [HYOO-luht PAK-erd] (HP) will cut thousands of jobs to restructure and increase sales.
Last October, the company announced that it is planning to slash 7,000 to 9,000 employees from its workforce. HP, which had around 350,000 employees worldwide back in 2011, only has approximately 50,000 people as of 2018 due to multiple layoffs in recent years.
The company will reduce its manpower by firing people and offering eligible staff the chance to do voluntary early retirement. By the end of the 2022 fiscal year, the job cuts are expected to help save the company $1 billion.
The move comes after the company went through a period of flux. For one, HP’s current CEO stepped down due to personal reasons. He was succeeded by Enrique Lores, a longtime HP executive. The company’s printing business has also been falling short of expectations, as HP’s shares plummeted by 30% in the past year.
Most of HP’s profit comes from its printing supplies business, primarily from its ink cartridges. However, sales have been low because consumers are printing less and buying cheaper ink alternatives, usually from online stores. According to a report, HP’s market share for online sales is smaller than its competitors’.
To deal with the challenges, Lores plans to update the company’s products and prices. HP will increase prices for printers that can be used with non-HP ink cartridges to maximize earnings from the hardware. Then, it will tweak its more affordable printers to make them compatible only with HP ink.
Through these efforts, HP expects to earn at least $3 billion for the 2020 fiscal year.